• VALR exchange has been licensed by the Financial Sector Conduct Authority (FSCA).

• VALR’s commitment to regulatory compliance and investor protection is demonstrated through this acquisition.

• As a Category I license holder, VALR offers trade and advisory services, while the Category II licenses allow the management of customer portfolios and product development.

South African cryptocurrency exchange VALR has secured two pivotal licenses from the Financial Sector Conduct Authority (FSCA), aligning with the latest regulatory requirements for industry firms.

This achievement positions VALR as one of the first cryptocurrency companies in South Africa to obtain both Category I and II Crypto Asset Service Provider (CASP) licenses.

VALR Exchange Secures Dual Crypto Licenses in South Africa

VALR, which garnered $55 million in equity funding from prominent investors such as Pantera Capital and Coinbase Ventures, collaborated with South African regulators. It has created a robust regulatory framework that encourages the growth of the cryptocurrency and blockchain sector while ensuring investor protection.

Speaking to Cointelegraph, VALR co-founder and CEO Farzam Ehsani expressed the significance of this milestone. “Our license underscores our unwavering dedication to compliance, security, and providing a trustworthy platform for the crypto community. We welcome this regulatory milestone for South Africa and applaud the regulators for taking this significant step for the nation,” Ehsani said.

Understanding the Licenses

The FSCA opened applications for CASP licenses in June 2023, requiring crypto asset service providers to comply with South African regulations by November 2023. This move is part of a broader effort to regulate the cryptocurrency industry under the Financial Advisory and Intermediary Services Act.

Ehsani elaborated on the distinctions between VALR’s two license types. The Category I license is the standard financial service provider (FSP) license needed for a CASP to offer advice or exchange services to customers in South Africa.

ALSO, READ: South Africa’s Model: A Blueprint for Crypto Regulation in Africa.

The Category II license, or discretionary mandate license, allows VALR to manage customer portfolios and explore novel product categories, such as bundled offerings.

This regulatory framework aims to protect customers and investors while allowing regulators to enforce compliance measures. South Africa was the first African country to license cryptocurrency exchanges, a process that has been in place since 2021.

Growing Presence and Impact

In addition to its achievements in South Africa, VALR has expanded its footprint globally. The exchange, which allows users to buy, sell, store, and transfer Bitcoin and over 60 other cryptocurrencies, serves over 1,000 corporate and institutional clients and more than half a million traders worldwide.

 VALR recently secured approval to offer crypto services in Europe and obtained a license in Dubai, further solidifying its position as a leading crypto asset service provider.

The FSCA approved 59 license applications from cryptocurrency platforms in March 2024, with 262 applications under review. This highlights the growing regulatory focus on the cryptocurrency industry in South Africa. The aim is to create a secure and trustworthy environment for investors and consumers.

Advancing Compliance and Innovation

VALR has been at the forefront of efforts to foster innovation within the crypto industry as part of its ongoing commitment to regulatory compliance. By working closely with regulators, VALR aims to safeguard the public interest while allowing technological advancements to flourish.

The revised regulatory requirements also extend to advertising standards. South Africa’s Advertising Regulatory Board updated its guidelines to protect consumers from unethical advertising practices related to cryptocurrency investments.

These rules require clear communication about crypto investment risks and balanced messaging regarding potential returns and risks.

“Obtaining the CASP license from the FSCA is a monumental achievement for VALR. Over the past six years, we have actively collaborated with South African regulators who have established a regulatory regime. This allows innovation to flourish while protecting the public interest. Our license underscores our unwavering dedication to compliance, security, and providing a trustworthy platform for the crypto community. We welcome this regulatory milestone for South Africa and applaud the regulators for taking this significant step for the nation,” said Farzam Ehsani, co-founder and CEO of VALR.

Conclusion

VALR’s dual CASP licenses mark a significant milestone for the exchange and the broader South African cryptocurrency market. VALR demonstrates its commitment to regulatory compliance and investor protection by obtaining these licenses.

It sets a precedent for other crypto asset service providers in the region. As the industry evolves, VALR’s proactive approach to regulation and innovation positions it as a critical player in the global crypto landscape.

ALSO, READ Visa and VALR Collaborate to Bring Crypto Payments to Africa.