South Africa’s FSCA Crypto License Framework: CASP Application Progress and Requirements Through 2024

When South Africa’s Financial Sector Conduct Authority (FSCA) officially called crypto assets “financial products” under the Financial Advisory and Intermediary Services (FAIS) Act, it was the first time in Africa that digital assets were accepted.

The FSCA crypto license framework has now processed more than 400 applications since the application window closed on November 30, 2023. By December 2024, 248 licenses had been granted.

TL:DR,

• The FSCA crypto license is not a standalone permit, it’s a FAIS Category I FSP license under crypto-related subcategories. By December 2024, 248 licenses had been granted.
• South Africa’s CASP regime runs through FAIS + FICA, with strict Fit and Proper and AML/CFT expectations, and the next big milestone is the Travel Rule on April 30, 2025.
• The framework gives compliant CASPs clearer legal standing and access to traditional finance, but cost and operational requirements have pushed many applicants to withdraw.

To some experts it’s a shift driven by a June 2021 FATF Mutual Evaluation Report; to local businesses the FSCA crypto license is their green card to better clientele, and to Africa it’s adopting digital assets properly.

This guide details exactly how this licensing framework functions, the current status of approvals, and the critical compliance deadlines that Crypto Asset Service Providers (CASPs) must meet to operate legally.

What the FSCA Crypto License Actually Covers

Let’s get the facts straight: even though people often say it, there is no single “crypto license” in South Africa. Instead, businesses need to apply for a Category I Financial Services Provider (FSP) license with a certain product subcategory:

• Product Category 1.27 (Crypto Asset): For companies that give advice and act as middlemen (like exchanges and brokers).
• Product Category 2.21: For entities offering discretionary investment management (asset managers).

The October 19, 2022 declaration (Government Gazette No. 47334, General Notice 1350) defined a crypto asset as

“a digital representation of value that is not issued by a central bank but is capable of being traded, transferred, or stored electronically by natural and legal persons for the purpose of payment, investment, and other forms of utility; applies cryptographic techniques; and uses distributed ledger technology.”

Types of crypto licenses in South Africa under this framework include:

• Advisory services: Helping clients figure out how to invest in crypto assets
• Exchange services: running marketplaces where you can trade fiat for crypto, crypto for fiat, and crypto for crypto
• Digital custodial and wallet services: Keeping clients’ crypto assets safe and secure
• Payment gateway services make it easier for digital payments to happen in the crypto world.
• Tokenization services: making tokens that stand for real-world things
• Index-based products: Giving people tools that keep track of groups of crypto assets

According to CASP rules, crypto miners, node operators who do network work, and NFT service providers don’t need licenses.

RELATED TOPIC: SA Slams the Door on Crypto Loopholes: Cross-Border Rules Drop in 2025!

The Application Timeline and Current Status

The Critical Deadline

The FSCA opened a six-month crypto exchange license application window in South Africa from June 1 to November 30, 2023.

Those who obeyed the rules were still able to work under a temporary exemption while their applications were being reviewed. Companies that didn’t apply by this date quickly broke the law.

Progression of Approval

The FSCA processed applications in waves throughout 2024, while many people observed South Africa’s vibrant community.

• April 2024: 75 licenses were approved out of 374 applications, which is a 20% approval rate.
• June 2024: 138 of 383 applications were approved (36%).
• December 2024: 248 applications were approved out of 420 (59%).

The first wave of approvals for the FSCA crypto license went to big companies like Luno, VALR, and Jaltech in April 2024. In November 2024, Yellow Card said it was approved.

The Other Side: Withdrawals and Declines

Not everyone made the cut; actually, out of 420 applications, 106 voluntarily withdrew. This was mainly after the FSCA engaged with applicants regarding their business models.

Nine applications were turned down, mostly because they didn’t meet the “Operational Ability” and “Competency” requirements in Board Notice 194 of 2017.

Applicants often withdrew instead of receiving a formal rejection if they couldn’t demonstrate strong AML/CFT systems, sufficient capital, or appropriate governance structures.

RELATED TOPIC: South African Politics Enters New Era With Crypto-Friendly Leadership

Practical Requirements and Trade-offs

To prepare for a crypto exchange license application in South Africa, a business must meet a set number of conditions. Getting an FSCA crypto license does give you an edge, but you have to meet their requirements.

1. FAIS Act requirements include the following: key people must meet fit and proper standards, follow codes of conduct, and be supervised by the FSCA at all times.
2. FICA requirements include registering as accountable institutions (required since November 29, 2022), following all AML/CFT rules, and the upcoming Travel Rule (notably, South Africa has set no de minimis threshold—information must be collected for all crypto transfers).
3. Operational Ability: Applicants must show that they have the systems in place to handle risk and keep client money safe.

One of the more brilliant takes of this framework is South Africa opting to extend the existing FAIS framework rather than creating one from scratch. Doing so provides a comprehensive framework that allows licensed CASPs to access banking services and institutional capital previously unavailable.

Furthermore, the FSCA can now “protect consumers from crypto scams and empower authorities to take action,” addressing FATF Recommendation 15 on New Technologies.

On the other side of the coin, the framework still has some gaps. The notion of crypto as a legal tender is out of the picture for Africa, which is a no-brainer for most regulation.

However, token issuance not covered by existing securities laws and stablecoin regulation remains in a “grey area” pending the Conduct of Financial Institutions (COFI) Bill.

Cost is still a major barrier for most businesses, with the 106 withdrawals showcasing how many business models aren’t economically viable under current Fit and Proper requirements.

The COFI Transition and Travel Rule

The COFI Bill, expected to pass by 2027 according to the FSCA’s three-year regulation plan, will eventually replace the FAIS Act with an “activity-based” regulatory framework.

Current FSCA crypto license holders will transition into this new system. The bill is expected to address current gaps around token issuers and provide clearer rules for stablecoins.

In the interim, the April 30, 2025, Travel Rule implementation represents the next major compliance milestone for all licensed CASPs. Unlike many jurisdictions, South Africa requires information collection for all crypto transfers, with no minimum transaction exemption.

The requirements may seem high (25% withdrawal rate), but the results are looking good. Almost 60% of applications were approved within 18 months of the deadline. Now, major exchanges and institutional players are working under clear legal authority.

South Africa still has fewer cryptocurrency transactions than Nigeria, but it’s leading Africa toward its blockchain future in terms of regulation, adoption, and even infrastructure.