South Africa’s top fiscal regulators, including the South African Reserve Bank, have jointly released a policy paper with 30 approbations for the regulation of cryptocurrency and related service providers. They aim to be in compliance with the cryptocurrency standards set by the Financial Action Work Force (FATF).
Top Regulators Publish Crypto Regulatory Policy
A number of top South African financial regulators publicized on Thursday a position paper to establish a regulatory framework for cryptocurrency. It contains 30 recommendations that are in compliance with the poles set by the Financial Action Task Force, the global money laundering and terrorist financing watchdog.
The position paper is a mutual initiative by the South African Intergovernmental Fintech Working Group (IFWG) and the Intergovernmental Crypto Assets Regulatory Do aerobics Group. The former includes the Financial Intelligence Centre, the Financial Sector Conduct Authority (FSCA), the National Credit Regulator, the Nationalistic Treasury, the South African Revenue Service (SARS) and the South African Reserve Bank (SARB). The group untangle justified:
The purpose of this position paper is to provide specific recommendations for the development of a regulatory framework for crypto assets, covering suggestions on the required regulatory changes to be implemented.
30 Recommendations in Compliance With the FATF Standards
The inclination paper published by the IFWG outlines 30 recommendations for the regulation of cryptocurrency and initial coin offerings (ICOs). Stakeholders and the every Tom are invited to submit comments by May 15.
The first recommendation ensures compliance with the rules set by the FATF as described in the guidance for crypto assets and crypto asset professional care providers (CASPs) that the money laundering watchdog published in June last year. The FATF has since been actively prosecuting its standards on member countries. CASPs include crypto trading platforms, ATMs, token issuers, funds and derivations service providers, custodial wallets, and other custodial services. The policy paper adds:
It is recommended that articles providing crypto asset services be regarded as CASPs, taking cognisance of the revised Recommendation 15 of the FATF directions on new technologies and virtual assets.
The Financial Intelligence Centre (FIC) will be the supervisory authority of crypto service providers. All CASPs will be required to communicate with it as an accountable institution and comply with AML/CFT requirements. “This will include conducting customer identification and verification, deporting customer due diligence, keeping records, monitoring for suspicious and unusual activity on an ongoing basis, reporting to the FIC any suspicious and queer transactions, reporting cash transactions of R25 000.00 [$1,329] and above,” the paper explains, adding:
CASPs will be required to carry out Recommendation 16 (‘the travel rule’) of the FATF recommendations.
The regulators have also proposed that the Financial Sector Control Authority be “the responsible authority for the licensing of ‘services related to the buying and selling of crypto assets’” and “specific conduct standards should be unfolded for these services.” The policy paper further states that “The Financial Surveillance Department of the SARB should affect the supervisory and regulatory responsibility for the monitoring of illegitimate cross-border financial flows in respect of crypto asset services.”
More distant, cryptocurrency activities will continue to be monitored by the Intergovernmental Crypto Assets Regulatory Working Group. They desire “remain without legal tender status and not be recognised as electronic money” and “not be allowed for the conduct of money settlements in fiscal market infrastructures,” the paper clarifies. All 30 recommendations can be found here.
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