According to a recently released amendment document, lawmakers in South Africa have now included cryptocurrency enterprises on the list of institutions that must be held accountable.
The Financial Intelligence Centre Act stated that the list of accountable institutions includes,
“A person who carries on the business of one or more of the following activities or operations for
or on behalf of a client:
(a) Exchanging a crypto asset for a fiat currency or vice versa;
(b) exchanging one form of crypto asset for another;
(c) conducting a transaction that transfers a crypto asset from one crypto asset address or
account to another;
(d) safekeeping or administration of a crypto asset or an instrument enabling control over a
crypto asset; and
(e) participation in and provision of financial services related to an issuer’s offer or sale of a crypto asset,
where “crypto asset” means a digital representation of perceived value that can be traded or transferred electronically within a community of users of the internet who consider it as a medium of exchange, unit of account, or store of value and use it for payment or investment purposes, but does not include a digital representation of a fiat currency or security as defined in the Financial Markets Act, 2012 (Act 19 of 2012).”
Furthermore, businesses that offer exchange services, or are responsible for taking care of the safekeeping of crypto will have to identify and define new and existing clients and keep records of their identity. The rule was added as an amendment to the country’s Financial Intelligence Act of 2001 and will take effect on December 19.
Following the early November collapse of the world’s largest exchange, FTX, regulators from all over the world have been advocating for higher standards and more openness in the cryptocurrency industry.
The South African Reserve Bank’s Deputy Governor, Kuben Naidoo, announced in July that the nation would establish a regulatory framework for cryptocurrencies. South Africa categorized cryptocurrencies as financial items in October.