South Africa Starts Issuing Crypto Licenses, And Luno, Zignaly Among First Recipients

South Africa's financial regulator has started issuing crypto licenses, with exchange platform Luno and decentralized social investing marketplace Zignaly among the first batch of companies to receive approvals.

Luno shared that it had received approval as a financial service provider under the country's Financial Advisory and Intermediary Services Act, 2002 (FAIS). Luno PTY LTD now appears on FSCA's registry of authorized entities.

Zignaly told CoinDesk that it had received a Category 2 - Discretionary Financial Service Provider (FSP) license and appears in the FSCA registry as Merritt Administrators PTY LTD.

The South African regulator started accepting licensing applications from crypto firms in June 2023 after legislation was passed to bring crypto into the scope of regulated financial activities in the country. The FSCA has promised hefty fines for companies that try to operate without obtaining the right approvals.

Around 60 firms are expected to be approved by the regulator in the short term.

"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," said Christo de Wit, Luno's country manager for South Africa.

Zignaly's Category 2 license will allow the company to conduct discretionary fund management, "where Zignaly is authorized to make investment decisions on behalf of investors, and very importantly – may act as a custodian of funds for its clients,” the company said in a press statement. “It is essentially a full asset management license, comparable to what TradFi behemoths like Blackrock or Vanguard have at their disposal."