- The FSCA began distributing licenses, and incorporating crypto activities into regulated financial sectors, starting with Luno and Zignaly.
- Luno and Zignaly received specific licenses, enabling operations and discretionary fund management under South Africa’s financial regulations.
- These licenses allow for strategic growth, enhanced security, and global platform adoption, aligning with regulatory expansions and financial innovation.
The financial oversight body of South Africa has initiated the distribution of cryptocurrency licenses, with Luno and Zignaly being some of the earliest recipients.
Luno announced it has been authorized as a financial service provider under the Financial Advisory and Intermediary Services Act of 2002 (FAIS), and is now listed in the Financial Sector Conduct Authority’s (FSCA) registry as Luno PTY LTD. Similarly, Zignaly reported obtaining a Category 2 – Discretionary Financial Service Provider (FSP) license and is registered in the FSCA database as Merritt Administrators PTY LTD.
In June 2023, South Africa’s regulatory body began accepting applications for cryptocurrency licensing following new legislation aimed at incorporating crypto activities within the regulated financial sector of the country. The Financial Sector Conduct Authority (FSCA) has warned of substantial penalties for entities that operate without the proper licenses. It is anticipated that about 60 companies will receive approval from the regulator in the near future.
Christo de Wit, the country manager for South Africa at Luno, expressed optimism about this development.
“This is a positive step for both the cryptocurrency industry and South Africans. Compliance, safety and security for our customers have driven our growth since the beginning and will continue to be priorities as we expand our offering to introduce more features and products for financial institutions.”
Christo de Wit, country manager for South Africa, Luno
Zignaly has announced that its Category 2 license permits it to engage in discretionary fund management. This authorization allows Zignaly to make investment decisions on behalf of its clients and crucially, to act as a custodian of client funds, as stated in a company press release. “This license effectively grants us the same full asset management capabilities that major traditional finance (TradFi) players like Blackrock or Vanguard possess,” the company highlighted.
Additionally, Zignaly views this license as a strategic advantage to proactively address potential regulatory expansions into decentralized finance sectors.
In 2022, the company secured a $50 million financing agreement with a fund based in Luxembourg.
This financing from GEM allowed the company to propel significant new product development and global adoption of the Zignaly platform, enabling them to empower the masses with a vastly better way to invest, said Zignaly CEO Bartolome Bordallo in the press release.
