The Legal and Regulatory Framework for Cryptocurrency Trading in South Africa

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Cryptocurrency trading has become a popular way for South Africans to diversify their investment portfolio, however some of us may be unfamiliar with the legality of the industry.

Is Trading Cryptocurrency Legal in South Africa?

Just that a lot of it is still very unregulated, which while it makes it a little more troublesome, by no means makes it unprofitable, and in fact may still hold some advantages.

Let’s look take a look into the legal and regulatory framework of the South African Crypto industry and go over:

So How Legal is Cryptocurrency in South Africa?

Completely legal, but slowly getting regulated.

Both owning and trading cryptocurrency is legal in South Africa, which strikes a contrast to other BRICS countries like India, where it is significantly more restricted, and China where it is private technologies are outlawed.

It is important to note that in 2023 these matters are progressing faster and faster as we see stiff competition forming against the US dollar’s use as the main global reserve currency, and a lot of our future policies and exchanges may rely heavily on the use of cryptocurrencies and blockchain technologies, and we may soon find ourselves moving our entire monetary system to a form of CBDC as pressure from global governments change to the web 3.0 equivalent of global currency.

We will look into this a little more in our part 4 of this series Future Developments and Trends in the Cryptocurrency Market in South Africa

Cryptocurrency trading  will assist in helping the world balance its scales, digitally

The Legal Definition of Cryptocurrency in South Africa

As we mentioned above, South African law does not define cryptocurrency as legal tender or a currency. Instead, it is classified as a financial instrument. This means that cryptocurrency is subject to financial regulations, including those imposed by Act 37 & 38 of the South African Constitution, the Financial Advisory and Intermediary Services Act (FAIS) and Financial Intelligence Centre Act (FICA)

These regulations are both designed to prevent money laundering and protect investors, however having worked as a key individual and somebody very familiar with the FAIS act, such regulatory bodies often have little effect in country with a national dynamic like South-Africa, or at the very least take a while to catch up with the ever changing industry.

Cryptocurrency trading is changing the way the financial world works

How is crypto regulated in SA?

In South Africa, the regulation of cryptocurrency is mainly done by the Intergovernmental FinTech Working Group (IFWG)

The IFWG aims to develop a regulatory framework for the cryptocurrency industry in South Africa to ensure that it operates safely and within the law and is made up of several other governing bodies including the South African Reserve Bank (SARB), the Financial Sector Conduct Authority (FSCA), and the National Treasury.

If you want to trade on somebody else behalf or start of form of collective, then it is necessary to register as a financial services provider and comply with the regulations imposed by FICA and FAIS. This includes the appointment of a qualified Key Individual and registering with the Financial Sector Conduct Authority (FSCA).

The regulatory framework is designed to protect investors from scams and fraudulent activities. Traders should only use reputable cryptocurrency exchanges and should be wary of offers that sound too good to be true. This is a important step so we will look a little deeper into this and look at some common best practices.

Bitcoin was the start of all cryptocurrency trading

What type of cryptocurrency scams should I look out for?

Anything that remotely smells of a pyramid scheme, or sounds too good to be true. While incredible returns are possible, this is always done through mining, staking, trading them wisely or investing them into the right type of financial products, or rather decentralized financial products, such as De-Fi, NFT’s, Trading bots.

The entire purpose of owning crypto is owning it yourself, and the only way to do that is to have self-custody of your assets, and while we compromise with exchanges to access financial products and services, we should always insure that these are legitimate and trustworthy partners we choose to interact with.

Be smart, trade with an exchange like Bybit for your derivative trading and Binance for your spot trades.

This way you can cut out the snake oil salesman, and learn to take responsibility for the financial decisions you take and make!

As for those inevitable mistakes, we can help you avoid a lot of them with our beginner guide to crypto and our article on how to not lose all your money trading crypto!

Always do your own research and never trade more than you can afford to lose!

Cryptocurrency trading will change the world


We hope that this article has provided you with a comprehensive understanding of the legal and regulatory aspects of cryptocurrency trading in South Africa. In the next article in our series, we will discuss the tax implications of cryptocurrency trading in South Africa.

Stay tuned for more valuable insights and practical tips on how to navigate the world of cryptocurrency trading in South Africa.

The other articles in this 5-part series cover:

  1. Introduction to cryptocurrency trading in South Africa
  2. Legal and Regulatory Framework for Cryptocurrency Trading in South Africa
  3. Tax Implications of Cryptocurrency Trading in South Africa
  4. Future Developments and Trends in the Cryptocurrency Market in South Africa
  5. Picking the right exchange for trading cryptocurrency in South-Africa

Then be sure to check out our trading resources to make sure you have the knowledge and capability to match your shiny new trading platform!
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TLAT is reader-supported, when you buy through the links on our site, we may earn an affiliate commission. Learn More