The Financial Sector Conduct Authority says it has approved 300 of the 512 crypto asset service provider licence applications received by 12 December.
Fourteen applications were declined, the Authority said in a statement on Monday.
The reasons CASP licence applications have been declined include the failure of applicants to meet the fit and proper requirements under the Financial Advisory and Intermediary Services Act, particularly in respect of:
- The operational ability requirements – failing to provide clear and comprehensive business plans and business model descriptions outlining crypto asset activities and key business and operational frameworks to support such activities.
- The competency requirements – the failure or inability to demonstrate the requisite knowledge and practical experience pertaining to crypto assets.
A further 121 applications were voluntarily withdrawn by applicants following engagements with the FSCA on the appropriateness of their business and operating models. The Authority is considering the balance of the applications.
Institutions that have voluntarily withdrawn their applications, or whose applications were declined, can re-apply provided they demonstrate full and proper compliance with the licensing requirements. In the meantime, they may not undertake any CASP-related activities as defined under the FAIS Act, the FSCA said.
It warned that any institution or person found to be conducting CASP-related activities without a licence will be subject to enforcement action.
To date, the FSCA has initiated 81 investigations into potential unlicensed CASP businesses. Of these, 25 cases were closed, as no enforcement action was required, mainly because the investigated parties ceased trading or were dormant. Fifty-six cases are still under investigation.
The Authority reminded the public that it licenses and supervises CASPs only insofar as they render financial services related to crypto assets as defined under the FAIS Act – that is, advice, and intermediary and investment management services. This excludes the recognition of crypto assets as a legal form of tender or “cryptocurrency”. The South African Reserve Bank does not currently recognise crypto assets as currency.
FICA supervision
In addition to supervising CASPs as financial services providers under the FAIS Act, the FSCA supervises CASPs in respect of their anti-money laundering (AML), counter-financing-of-terrorism (CFT), and counter-proliferation financing (CFP) obligations under the Financial Intelligence Centre Act.
The FSCA conducted its first round of supervisory inspections between January and March 2025. These inspections focused on the following three areas of FICA compliance:
- Governance arrangements;
- Risk Management and Compliance Programmes; and
- Business risk assessments.
The Authority planned to conduct a further 30 supervisory inspections between April 2025 and March 2026, of which 21 have been completed.
“Most of these inspections cover the full range of compliance requirements under FICA and are intended to provide an initial assessment of the ability of newly licensed CASPs to comply with their regulatory obligations in line with their inherent AML/CFT/CFP risk exposures,” the FSCA said.
In August 2025, the FSCA established the Crypto Asset Supervisory Engagement Forum, which has the following objectives:
- Help to develop a deeper understanding of the risks, trends, and challenges facing CASPs.
- Allow for regular information sharing, education, and outreach with the sector to improve understanding of risks and supervisory expectations, as well as enhance CASPs’ compliance with their regulatory obligations.
- Facilitate co-ordination and alignment between different regulatory agencies on industry expectations, risk management, regulatory developments, and supervisory approaches impacting CASPs
Expiry of Regulatory Exam exemption
In terms of the Exemption Notice published on 11 May 2023, licensed CASPs and their key individuals were, for 18 months, exempted from Part 4 of Chapter 3 of the Determination of Fit and Proper Requirements relating to the Regulatory Examinations.
The Exemption expired on 11 November 2024. In response to market requests, the FSCA extended the Exemption until 30 June 2025 and confirmed that no further extensions would be granted. This means that all licensed CASPs and their key individuals needed to fulfil the RE requirements as prescribed in Board Notice 194 of 2017 by 30 June 2025.
Failure to comply with these requirements may lead to regulatory action, including suspension or withdrawal of licences as contemplated in section 9 of the FAIS Act.
