SoSouth Africa’s top financial regulators, including the South African Federal Reserve Bank , have jointly released a policy paper with 30 recommendations for the regulation of cryptocurrency and related service providers. They aim to be in compliance with the cryptocurrency standards set by the Financial Action Task Force (FATF).

Top Regulators Publish Crypto Regulatory Policy

A number of top South African financial regulators published on Thursday an edge paper to determine a regulatory framework for cryptocurrency. It contains 30 recommendations that are in compliance with the standards set by the Financial Action Task Force, the worldwide concealment and terrorist financing watchdog.

The position paper may be a joint initiative by the South African Intergovernmental Fintech working party (IFWG) and therefore the Intergovernmental Crypto Assets Regulatory working party . the previous includes the Financial Intelligence Centre, the Financial Sector Conduct Authority (FSCA), the National Credit Regulator, the National Treasury, the South African Revenue Service (SARS) and therefore the South African Federal Reserve Bank (SARB). The group explained:

The purpose of this position paper is to provide specific recommendations for the development of a regulatory framework for crypto assets, including suggestions on the required regulatory changes to be implemented.

South Africa Proposes 30 Rules to Regulate Cryptocurrency as FATF
A number of South African regulators have jointly published a set of recommendations to establish a regulatory framework for cryptocurrency in compliance with the standards set by the FATF.

30 Recommendations in Compliance With the FATF Standards

The position paper published by the IFWG outlines 30 recommendations for the regulation of cryptocurrency and initial coin offerings (ICOs). Stakeholders and therefore the public are invited to submit comments by May 15.

The first recommendation ensures compliance with the principles set by the FATF as described within the guidance for crypto assets and crypto asset service providers (CASPs) that the cash laundering watchdog published in June last year. The FATF has since been actively enforcing its standards on member countries. CASPs include crypto trading platforms, ATMs, token issuers, funds and derivatives service providers, custodial wallets, and other custodial services. The policy paper adds:

It is recommended that entities providing crypto asset services be regarded as CASPs, taking cognisance of the revised Recommendation 15 of the FATF recommendations on new technologies and virtual assets.

South Africa Proposes 30 Rules to Regulate Cryptocurrency as FATF
South Africa’s financial regulators, including the central bank, have recommended in their policy paper that the crypto regulation adopted be in compliance with the standards set by the FATF, including the infamous “travel rule.”

The Financial Intelligence Centre (FIC) are going to be the supervisory authority of crypto service providers. All CASPs are going to be required to register with it as an accountable institution and suits AML/CFT requirements. “This will include conducting customer identification and verification, conducting customer due diligence, keeping records, monitoring for suspicious and weird activity on an ongoing basis, reporting to the FIC any suspicious and weird transactions, reporting cash transactions of R25 000.00 [$1,329] and above,” the paper explains, adding:

CASPs will be required to implement Recommendation 16 (‘the travel rule’) of the FATF recommendations.

The regulators have also proposed that the Financial Sector Conduct Authority be “the responsible authority for the licensing of ‘services associated with the buying and selling of crypto assets’” and “specific conduct standards should be developed for these services.” The policy paper further states that “The Financial Surveillance Department of the SARB should assume the supervisory and regulatory responsibility for the monitoring of illegitimate cross-border financial flows in respect of crypto asset services.”

Further, cryptocurrency activities will still be monitored by the Intergovernmental Crypto Assets Regulatory working party . they’re going to “remain without tender status and not be recognised as electronic money” and “not be allowed for the conduct of cash settlements in financial market infrastructures,” the paper clarifies.

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