On the 19th of October 2022, The Financial Sector Conduct Authority (FSCA) published General Notice 1350 of 2022. Officially declaring a crypto asset as a financial product under the “Financial Advisory and Intermediary Services Act of 2002.
As per the General Notice, Crypto Assets are defined 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
In conclusion
The distribution of Crypto-Assets is now fully regulated by the FSCA. As the instrument is now defined as a financial product, it will receive its own sub-category. Additionally, all derivative instruments referencing Crypto-Assets, will fall under current regulations.
This is great news for consumer protection and a positive step forward for South Africa as a future Fintech hub.