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South Africa announces new framework to regulate cryptocurrency

South Africa announces new framework to regulate cryptocurrency

South Africa has issued a set of financial regulations to establish a regulatory framework for cryptocurrency. The top officials of the government published the framework which contains 30 recommendations which are in compliance with the standards set by the Financial Action Force, the global money laundering and terrorist financing watchdog.

A joint initiative by the South African government

The recommendation is a combined initiative of the South African Intergovernmental Fintech Working Group (IFGW) and the Intergovernmental Crypto Assets Regulatory Working Group. The IFGW incorporated by the Financial Intelligence Centre, the Financial Sector Conduct Authority (FSCA), the National Credit Regulator, the National Treasury, the South African Revenue Service (SARS) and the South African Reserve Bank (SARB). The group released a statement saying, “The purpose of this position paper is to provide specific recommendation for the development of a regulatory framework for crypto assets, including suggestions on the required regulatory changes to be implemented.”

FATF set the rules of the 30 recommendations for cryptocurrency regulation

The stakeholders and the public are asked to submit their comments on the position paper published by the IFWG by May 15. The rules set by the FATF as described in the guidance for crypto assets are ensured in the first recommendation that the money laundering watchdog published in June last year. The standards by the FAFT has been enforced on the member countries, CASPs include crypto trading platforms, ATMs, token issuers, funds and derivatives service providers, custodial wallets, and other custodial services .

However, the policy paper reads, “It is recommended that entities providing crypto asset services be regarded as CASPs, taking cognizance of the revised Recommendation 15 of the FATF recommendation on new technologies and virtual assets.”

The authority of crypto service providers will supervise the Financial Intelligence Centre (FIC). The paper further adds, “This will include conducting customer identication and verification, conducting customer due diligence, keeping records, monitoring for suspicious and unusual activity on an ongoing basis, reporting to the FIC any suspicious and unusual transactions, reporting cash transactions of INR 25000 and above.”