South Africa is set to enforce its Crypto Travel Rule regulations starting April 30, 2025, as part of its efforts to align with global anti-money laundering (AML) and counter-terrorist financing (CTF) standards.
The Financial Intelligence Centre (FIC) issued Directive 9, which will mandate the Crypto Asset Service Providers (CASPs) to implement the Travel Rule. This rule requires sharing transaction information to enhance transparency and combat illicit activities in the crypto space.
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A phased regulatory approach
The move follows recommendations by the Crypto Assets Regulatory (CAR) Working Group under the Intergovernmental Fintech Working Group (IFWG). Since the release of its 2020 Position Paper on Crypto Assets, South Africa has made notable strides in regulating the crypto industry.
In October 2022, the Financial Sector Conduct Authority (FSCA) declared crypto assets as financial products under the Financial Advisory and Intermediary Services Act (FAIS), bringing CASPs under formal regulatory oversight.
CASPs are now classified as accountable institutions under the Financial Intelligence Centre Act (FICA), requiring them to register with the FIC to implement customer due diligence measures and file reports on suspicious transactions.
Before now, CASPs have been granted a grace period from November 15, 2024, to prepare for full compliance with the Travel Rule. Under the new regulations, all crypto transactions, regardless of value, will be subject to Travel Rule obligations. However, transactions exceeding R5000 will require additional personally identifiable information (PII) to be shared between CASPs.
The FIC has also provided guidelines for handling transactions involving self-hosted wallets. CASPs must develop risk-based policies and procedures to manage potential risks associated with these wallets and ensure compliance with the FIC Act.
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South Africa’s vision for crypto regulation
The country’s progressive regulatory framework majorly aims to balance innovation with risk management, positioning it as a potential crypto hub in Africa.
The government’s commitment to fostering a secure and transparent crypto ecosystem is evident in its alignment with international standards, such as the Financial Action Task Force’s (FATF) Recommendation 16.
As the April 2025 deadline approaches, CASPs are urged to prioritise compliance to avoid penalties and contribute to South Africa’s growing reputation as a leader in crypto regulation.