South Africa's CASP licensing regime under the FAIS Act has reshaped the legal landscape for crypto businesses. With over 300 licences approved as at December 2025, this guide explains the framework and ongoing obligations.
The Regulatory Framework
In October 2022, the Financial Sector Conduct Authority (FSCA) declared crypto assets to be financial products under section 1 of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act). This declaration brought crypto asset service providers (CASPs) within the FAIS licensing perimeter, requiring any person rendering financial services in relation to crypto assets to hold an FSP licence as a Crypto Asset Service Provider.
The CASP licensing process opened on 1 June 2023. As at December 2025, the FSCA had received 512 CASP licence applications, of which 300 had been approved, 14 declined, and 121 voluntarily withdrawn, with 77 applications remaining under review. The licensing process has produced one of the most rigorous crypto regulatory regimes globally.
This guide explains the FAIS framework as it applies to crypto, the fit-and-proper requirements, the FICA obligations that apply alongside FAIS, and the ongoing supervisory environment that licensed CASPs operate within.
The Scope of the FAIS Perimeter
FAIS regulates the rendering of three categories of financial service: advice in respect of financial products; intermediary services, broadly defined to include arranging, dealing, custody, and similar activities; and investment management services.
For crypto businesses, the practical effect is that exchanges, custodial wallet providers, advisory platforms, payment gateways that route through crypto, index providers, and tokenisation services typically fall within the FAIS perimeter. Pure technology providers that do not render financial services — such as block explorer platforms or non-custodial wallet software providers — generally fall outside.
The FSCA's licensing powers are limited to crypto-related financial services as defined under FAIS. They do not extend to recognising crypto assets as legal tender, and the South African Reserve Bank continues not to recognise crypto assets as currency.
FAIS Licence Categories
Crypto businesses generally apply for one or more of: Category I (advice and intermediary services), the most common CASP licence category, applicable to advisory platforms, exchanges (intermediary services), and custodial wallet providers; Category II (discretionary investment management), applicable to crypto fund managers and discretionary portfolio services; and Category IV (assistance business FSPs), applicable in narrower contexts.
VALR's licence in April 2024 — covering both Category I and Category II — was an early benchmark for full-service crypto exchanges. Many platforms now hold dual licences to support both intermediary and investment management services.
Fit-and-Proper Requirements
Section 8 of FAIS requires applicants to satisfy fit-and-proper requirements set out in the General Code of Conduct and the Determination of Fit and Proper Requirements (Board Notice 194 of 2017, as amended). For CASP applicants, these requirements have been a substantial barrier to entry.
Honesty and integrity
Both the FSP and its key individuals must demonstrate honesty and integrity. Past insolvency, criminal record, or disciplinary action by other regulators is reviewed.
Competence
Key individuals must demonstrate the relevant qualifications, experience, and product-specific knowledge. The FSCA has indicated that competence in crypto specifically — not just general financial services experience — is required, and applications have been declined on grounds of inadequate crypto-specific expertise.
Operational ability
The FSP must demonstrate operational ability through clear and comprehensive business plans, risk management frameworks, governance structures, and policies and procedures specific to crypto activities. The FSCA has indicated that the most common ground for application decline is inadequate operational ability.
Financial soundness
Minimum capital and liquidity requirements apply, varying by licence category and the nature of the financial services rendered.
FICA Obligations
From 19 December 2022, CASPs were classified as accountable institutions under Schedule 1 of the Financial Intelligence Centre Act 38 of 2001 (FICA), pursuant to amendments published in Government Gazette 47596 of 29 November 2022. This brought CASPs within the AML/CFT regulatory regime, with obligations including Customer Due Diligence and Enhanced Due Diligence at onboarding and on an ongoing basis; implementation of a Risk Management and Compliance Programme (RMCP); record-keeping for prescribed minimum periods; reporting of cash transactions exceeding R49,999.99 and reporting of suspicious and unusual transactions; and compliance with the Travel Rule for crypto asset transfers between CASPs.
FICA obligations apply in addition to FAIS obligations. CASPs must therefore implement two parallel compliance programmes, with substantial overlap but distinct documentation requirements.
The Regulatory Examination Requirement
Key individuals and representatives of FSPs must pass FSCA Regulatory Examinations (RE1 and RE5). For CASPs, the original exemption from these examinations expired on 11 November 2024, and was extended by the FSCA to 30 June 2025, after which no further extension was granted. Failure to comply with the RE requirement may result in suspension or withdrawal of the licence.
Ongoing Supervisory Environment
Licensed CASPs are subject to active supervisory oversight. Between January and March 2025, the FSCA conducted its first round of ten supervisory inspections, focusing on governance arrangements, risk management programmes, and business risk assessments. A further thirty inspections were planned through March 2026, with twenty-one completed by late 2025. In August 2025, the FSCA established the Crypto Asset Supervisory Engagement Forum (CASEF) to facilitate ongoing dialogue with the industry.
The FSCA has also pursued enforcement action against unlicensed CASP activity. As at late 2025, the Authority had initiated 81 investigations into potential unlicensed CASP businesses, with 25 cases closed (typically because the investigated parties had ceased trading) and 56 ongoing investigations. Administrative penalties of up to R10 million per contravention may be imposed for unlicensed CASP activity.
The COFI Bill and Future Regulatory Architecture
The Conduct of Financial Institutions (COFI) Bill, when enacted, will replace the FAIS Act and substantially restructure the regulatory framework for financial services. CASPs should anticipate that their licensing and conduct obligations will transition from FAIS to COFI in the medium term, with the substantive supervisory expectations likely to be retained or enhanced rather than relaxed.
Practical Steps for Crypto Businesses
Crypto businesses operating in South Africa should: confirm whether the business activity falls within the FAIS perimeter — operational involvement in advice, intermediary, or investment management activities almost always triggers a licence requirement; if a licence is required and not yet held, apply without further delay — unlicensed CASP activity is the subject of active enforcement; if a licence is held, confirm that the RE requirement has been satisfied for all key individuals and representatives; implement and document the FICA RMCP, with specific focus on crypto-specific AML/CFT risks (chain analytics, mixer exposure, sanctions screening of wallet addresses); and prepare for FSCA on-site supervisory inspections by ensuring policies, procedures, and risk assessments are current and supported by board-level documentation.
How Mashiane Attorneys Can Assist
Our Digital Economy practice advises crypto businesses, fintech operators, and traditional financial institutions entering the crypto space on FAIS licensing strategy, application drafting and submission, fit-and-proper assessments, FICA compliance frameworks, COFI Bill transition planning, and FSCA supervisory engagement. Contact our team for a confidential consultation on a CASP licensing or compliance matter.