Cryptocurrency exchange Luno is one of the first firms to receive a license from the Financial Services Conduct Authority (FSCA) in South Africa, allowing the exchange to operate as a financial services provider in the country.

In an announcement, Luno said it has been awarded its financial services provider license following the FSCA’s declaration of crypto assets as a financial product in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS).

“As a homegrown trailblazer with more than ten years of experience in the crypto market, Luno is thrilled to be the first licensed crypto asset service provider in the country,’ said Christo de Wit, Luno’s country manager for South Africa, in a press release.

“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 Wit.

Luno is the first dedicated Crypto Asset Service Provider in South Africa to be awarded its Financial Services Provider licence 🎉

Read the full story here:https://t.co/D9rhnRVd5S pic.twitter.com/xj2qh7Kxfo

— Luno (@LunoGlobal) April 11, 2024

Luno is a crypto exchange with a cryptocurrency investment app and was first launched in 2013. It is available in more than 40 countries across Europe, Africa, Asia and Australia.

FSCA to Authorize 59 Digital Asset Firms

In March, it emerged that the FSCA is approving 59 operating licenses for cryptocurrency exchanges. There have been more than 300 South African crypto providers seeking permits and out of those only 59 have been approved. By law, digital-asset exchanges require permits to operate in the country.

Back in 2022, the FSCA declared cryptocurrency assets to be financial products and made it clear they needed to be regulated to protect financial customers from risks and prevent money laundering and terrorism financing. The FSCA gave exchanges until November 30 to apply for licenses or the firms would risk facing enforcement action.

FSCA’s Framework for Regulating Crypto Assets

In 2021, the FSCA published a paper highlighting that crypto assets will be brought into the South African regulatory purview in a “phased and structured manner.”

The FSCA went on to explain given the increased retail interest in crypto assets, growing instances of consumer abuse, fraud and market misconduct have been noted both internationally and in South Africa. Recent schemes highlighted in the media further emphasise the need for the South African authorities, predominantly through the FSCA, to take action against the growing tendency for market abuse under the guise of crypto assets.