Several African countries are moving towards regulating cryptocurrencies. One key step is closely monitoring transactions involving crypto assets that were previously unregulated.
South Africa granted the first set of crypto licenses in April 2024 to 59 exchanges, including major players like Luno and VALR. The country’s anti-money laundering regulator, the Financial Intelligence Centre (FIC), has now issued Directive 9, requiring crypto platforms to verify the identities of both senders and recipients in cryptocurrency transactions.
This directive is in line with the Financial Action Task Force’s (FATF) global standard known as the “travel rule,” aimed at combating money laundering and terrorist financing. Compliance with these regulations is part of South Africa’s efforts to be removed from the FATF greylist.
Beginning April 30, 2025, the FIC will implement a tiered system based on transaction value to gather information on individuals and organizations involved in crypto transactions.
For transactions below R5,000 ($277), crypto platforms must record the names and wallet addresses of both the sender and receiver. For transactions exceeding this amount, platforms must collect and submit personal details, account information, residential addresses, wallet addresses, and valid identification used during KYC processes.
Intermediary platforms assisting crypto companies with on-ramp and off-ramp services must securely transmit and store this data to ensure traceability of funds.
South Africa is not alone in these efforts. Other countries like Nigeria and Kenya have also expressed interest in monitoring crypto transactions closely. South Africa is also planning to impose taxes on crypto users.
Cryptocurrencies, known as the dark horse of financial assets, are often considered untraceable, making it challenging for governments to monitor transactions.
The regulations also require platforms to monitor and gather additional information on high-risk transactions involving unhosted wallets to prevent financial crimes while safeguarding user privacy and data.
South Africa, along with 13 other African countries, is on the FATF Greylist. Exiting this list will enhance South Africa’s international financial standing and attract more foreign investments.