As more African countries move closer to regulating cryptocurrencies, South Africa has followed suit to closely monitor transactions involving crypto assets by putting out new regulations. South Africa issued its first crypto licenses to 59 exchanges, including market leaders Luno and VALR, in April 2024. Now, the country’s anti-money laundering regulator, the Financial Intelligence Centre (FIC), has issued Directive 9, which requires crypto platforms to verify the identity of senders and receivers in cryptocurrency transactions.
The policy is in line with the Financial Action Task Force (FATF) travel rules, a global standard for fighting money laundering and terrorist financing. Compliance with the directive is part of South Africa’s efforts to get off the FATF grey list.
From 30 April 2025, the FIC will introduce a tiered system based on transaction value to collect information on individuals and organizations sending and receiving cryptocurrencies. It ordered cryptocurrency platforms to record the names and wallet addresses of the sender and recipient for transfers of less than 5,000 rand ($277).
For cryptocurrency transactions above this amount, cryptocurrency exchanges must record and transmit the sender and recipient’s personal details, account information, residential addresses, wallet addresses and all valid means of identification used during KYC.
Intermediary platforms that help cryptocurrency companies provide on-ramp and off-ramp services must also transmit and store this data securely to ensure traceability of funds.
South Africa is not alone in this regard. Several other countries, such as Nigeria and Kenya, have previously expressed interest in closely monitoring cryptocurrency transactions. South Africa also plans to tax cryptocurrency users.
Cryptocurrencies, also known as secret financial assets, are notoriously untraceable, meaning governments cannot monitor what goes in and out of them.
In this sense, the regulation also requires platforms to monitor and collect additional information on high-risk transactions with un-hosted wallets to prevent financial crimes while protecting users’ privacy and data.
South Africa is on the FATF grey list along with 13 other African countries. Leaving the grey list would help improve South Africa’s international financial reputation and increase its chances of attracting foreign investment.
