The South African government claims that beginning on December 19, crypto entities—or companies whose operations involve the exchange or transfer of cryptoassets—will be added to the list of so-called responsible institutions. Businesses who perform transactions involving the conversion of one cryptocurrency into another or the transfer of a cryptocurrency “from one crypto asset address or account to another” will also be included.
Financial Intelligence Center Act amendments
he South African government recently said that individuals running businesses related to cryptocurrencies would be added to the list of organisations that are liable in terms of the regulatory scope.
An modification to schedules 1, 2, and 3 of the Financial Intelligence Centre Act, 2001 led to the addition of cryptocurrency enterprises to this list, according to a government notice published on November 29. Enoch Godongwana, the South African minister of finance, amended the Act, which will take effect on December 19.
Godongwana identifies the various crypto-related activities and operations that will be listed among the so-called accountable institutions in the notice. People “exchanging a crypto asset for a fiat currency or vice versa” are also planned to be included among the institutions or entities that will be covered.
Businesses who perform transactions involving the conversion of one cryptocurrency into another or the transfer of a cryptocurrency “from one crypto asset address or account to another” will also be included. The warning stated that individuals or organisations that provide custody services or those that issue crypto assets will be added to the list.
The Financial Markets Act does not define cryptocurrency assets
Less than two months after cryptocurrency assets were classified as a financial instrument by the Financial Sector Conduct Authority, South Africa has revealed its intention to add crypto enterprises to a list that also includes lawyers, investment schemes, and money transfer companies. According to Bitcoin.com News, this categorization necessitates that exchanges and other service providers of crypto assets submit an application for a licence in order to conduct business.
The South African finance minister also describes what, in the eyes of the government, qualifies as a crypto asset in the same official notification.
When referring to a crypto asset, the notice defined it as “a digital representation of perceived value that can be traded or transferred electronically within a community of internet users who consider it to be 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 a security as defined in the Financial Markets Act, 2012.”