VALR Gets Regulatory Approval in South Africa

FSCA has granted VALR both Category I and Category II licenses, marking a significant regulatory milestone.

The Financial Sector Conduct Authority (FSCA) has granted both Category I and Category II licenses to the South African cryptocurrency exchange known as VALR.

This clearance marks a significant regulatory milestone for the Johannesburg-based company, in line with the recently implemented cryptocurrency regulatory framework in South Africa. The company is among the first cryptocurrencies to obtain licenses that cover both categories.

Furthermore, the incorporation of cryptocurrencies into the country’s primary financial activities is considered a crucial action. As the co-founder and CEO of VALR, Farzam Ehsani expressed his satisfaction with the new development.

Farzam Ehsani observed that the FSCA’s decision demonstrated the exchange’s dedication to regulatory compliance, customer safety, and the development of an efficient cryptocurrency trading platform.

Valr is the largest cryptocurrency asset exchange in South Africa, with over 1,000 corporate and institutional clients and more than half a million dealers globally. Its trading volume makes it the largest cryptocurrency exchange in South Africa.

Details of the New VALR Licensing Framework

South African authorities granted the Luno and Zignaly licenses exactly four days later, as part of their heightened oversight and monitoring of the cryptocurrency industry.

The legislation that granted these licenses, the Financial Advisory and Intermediary Services (FAIS) Act aimed to protect consumers and investors by establishing transparent norms and regulations for financial service providers in the cryptocurrency market.

VALR holds a Category I license, enabling it to offer consumers straightforward advisory and intermediary services. These services include enabling cryptocurrencies to be traded and informing customers about investment opportunities.

In order to provide individualized investment solutions and manage assets on behalf of customers, the company must have a comprehensive Category II license. This license gives the company the authority to exercise discretion in the customer portfolios.

These licenses are a component of South Africa’s strategic initiatives to guarantee a safer and more regulated environment for cryptocurrency investors and users. South Africa is working to make this environment more secure.

Through the formalization of the operations of crypto asset service providers, the Financial Services and Competition Commission (FSCA) intends to protect the market from any potential abuses that may occur and promote a more favorable trust climate among players.

On a global scale, the cryptocurrency market is primarily uncontrolled, making it difficult to regulate illicit acts such as money laundering and supporting terrorist organizations.

The regulations are also intended to control these types of activities. Additionally, in January 2023, the Advertising Regulatory Board of the country changed its laws to incorporate more stringent requirements for advertisements for cryptocurrencies.

These standards serve to ensure that ads are honest and straightforward, while also providing a balanced perspective of the potential risks and returns that may be involved.

The purpose of this stage is to eliminate any additional material that could be deceptive to customers and to support ethical marketing norms in the cryptocurrency business, which is seeing rapid growth.