Crypto Crackdown In South Africa

As of 30 April 2025, Directive 9 will introduce stricter requirements for tracking and reporting crypto asset transactions. A key component of this is the "travel rule", which mandates that client details accompany domestic and cross-border crypto transfers.

This information includes the originator's full name, identity or passport number, date and place of birth, residential address if "readily available", and wallet address for transactions over R5 000.

South Africa's grey-listing by the Financial Action Task Force FATF has triggered a wave of stricter compliance regulations. Directive 9 is a direct response, placing responsibility on CASPs to ensure crypto transactions are not linked to money laundering, terrorism financing or other illicit financial activities.

This includes the "ordering CASP" the CASP where the sender of the crypto assets has their account, the "recipient CASP" the CASP that receives the crypto assets from the ordering CASP on behalf of the customer and any intermediary CASP a CASP that transmits and receives crypto assets on behalf of an ordering CASP or a recipient CASP or another intermediary CASP.

For example, external factors such as geopolitical developments could mean that individuals or groups turn to crypto to finance illegal activity because it is harder to trace than if these transactions were done using traditional banking systems. As part of their risk assessment framework, CASPs need to have a clear understanding of when to reject or suspend a cross-border crypto asset transfer and what follow-up action will be taken when this happens.