The head of enforcement at South Africa’s financial industry watchdog said on Jan. 24 that he expects the organization to decide the fate of 50 crypto firms’ license applicants in the coming weeks. The watchdog stated that from the more than 100 entities that applied for a license, 20 have since withdrawn from their respective applications.
The Cost of Obtaining a License
An official with the Financial Sector Conduct Authority (FSCA), South Africa’s financial industry watchdog, announced on Jan.24 that the organization expects to determine the fate of some 50 crypto firms’ license applications in the coming weeks. Gerhard van Deventer, the head of enforcement at the FSCA, revealed that out of the 90-plus applicants, 20 have since withdrawn.
As reported by Bitcoin.com News in late 2023, the South African watchdog had received a total of 93 applicants just days before the Nov. 30 deadline. This figure, which ultimately rose to 105, consisted of both current holders of FSP licenses and fresh applicants. At the time, Diketso Mashigo, the FSCA’s compliance head, confirmed that some applicants had decided against pursuing the license. Some eventually opted to operate outside the South African market.
Deventer, who made the remarks during a podcast, said he agrees with the assertion that some of the applicants may have chosen to withdraw because they have may been spooked by the cost of obtaining the financial service provider (FSP) license.
Applicants Fail to Meet Key Requirement
The FSCA’s head of enforcement however suggested that some of the withdrawing applicants only did so after they became aware of the burden of getting the license. Deventer suggested that many of those applicants had no realistic chance of meeting one key requirement.
“Applicants got stuck on the requirement of having an appropriate key individual because such an individual will need to have a very specific and relevant experience, qualifications and skills. And there is not a lot of that around if you take into account that crypto has not been around for a long time,” the FSCA’s Head of enforcement said.
Some of the applicants who found themselves in this situation said they would only reapply when a suitable individual is found, Deventer added.
Meanwhile, when asked about the changes to regulations proposed by the FSCA, Deventer said tackling scammers who purposely choose to operate outside its regulatory ambit is what motivated it to make the amendments. According to Deventer, once the new regulations kick in it will now be impossible for such entities to avoid regulation of their activities.
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