South Africa's Crypto Boom Sparks Money Laundering Fears
In April 2025, the Financial Intelligence Centre (FIC) issued a sector assessment report, flagging local Crypto Asset Service Providers (CASPs) as vulnerable to illicit financial activities. Meanwhile, crypto ownership in South Africa has surged, with over 5.8 million people, or 9.44% of the population, now owning crypto assets. However, the total value remains elusive due to rapid ownership changes.
As of February 10, 2025, 256 CASPs have registered with the FIC, following new laws introduced in December 2022. However, the actual number of active crypto operators could be higher, as some may function without proper registration. The FIC has warned the growing crypto community about high money laundering and terrorist financing risks in the CASP industry.
The sector still grapples with regulatory uncertainty, despite progress in regulatory clarity. A significant number of South Africans lack a clear understanding of crypto assets and CASP services, further compounding the risks. The lack of proper exchange control measures for crypto assets may exacerbate these risks. Adding to this, 25 South African crypto firms have headquarters abroad, with Singapore, Switzerland, and the UK each hosting three of these companies.
The FIC's report underscores the urgent need for enhanced consumer awareness and stricter exchange control measures to mitigate money laundering and terrorist financing risks associated with crypto assets. Despite progress in registration, the potential for unregistered operators highlights the need for vigilance and further regulatory clarity.
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