South African cryptocurrency exchange VALR has been granted licenses from the country’s financial regualtor.
VALR is one of the first cryptocurrency companies in South Africa to receive both the Category I and Category II CASP licenses,
The licences allow VALR to provide a range of crypto-related services and explore new product offerings.
Johannesburg (MarketsXplora) – Cryptocurrency exchange VALR has been granted new crypto asset service provider (CASP) licenses by South Africa’s Financial Sector Conduct Authority (FSCA).
VALR, which has secured $55 million in equity funding from investors like Pantera Capital and Coinbase Ventures, is now one of the first cryptocurrency companies in South Africa to receive both the Category I and Category II CASP licenses from the FSCA.
“Our license underscores our unwavering dedication to compliance, security, and providing a trustworthy platform for the crypto community. We welcome this regulatory milestone for South Africa and applaud the regulators for taking this important step for the nation,” said Farzam Ehsani, co-founder and CEO of VALR.
Farzam Ehsani, co-founder and CEO of VALR
The FSCA opened license applications in June 2023, giving crypto asset service providers six months to apply and comply with South African regulations under the country’s Financial Advisory and Intermediary Services Act.
Significance of VALR South Africa licenses
Ehsani explained the significance of the two categories of licenses. The Category I license is the standard financial service provider (FSP) license required for a CASP in South Africa to provide advice or exchange services to its customers. The Category II license, or discretionary mandate license, enables customers to give VALR and other licensed Category II FSPs a mandate to use their discretion in structuring the customer’s portfolio, paving the way for innovative product offerings.
“A CAT II license enables VALR to explore exciting product categories such as bundled offerings,” Ehsani said.
The new regulatory framework aims to protect customers and investors, while also enabling regulators to take enforcement action for compliance failures. South Africa has been at the forefront of cryptocurrency regulation in Africa, developing these frameworks since 2021.
“This regulatory milestone for VALR is a significant step forward for the cryptocurrency and blockchain sector in South Africa,” said Stephen Ethan, an analyst at MarketsXplora. “By securing these licenses, VALR has demonstrated its commitment to operating within a well-defined regulatory environment, which will bolster trust and drive further adoption of digital assets in the country.”
The granting of the CASP licenses to VALR is expected to have a ripple effect across the South African crypto ecosystem, as other exchanges and service providers seek to follow suit and obtain the necessary regulatory approvals to operate in the country.
“South Africa’s proactive approach to cryptocurrency regulation is setting an example for other African nations like Nigeria to follow,” added Ethan.
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