An exploration of the conduct of business legal and regulatory frameworks for cryptoassets in South Africa

Abstract

Cryptoassets, also commonly called cryptocurrencies, are among the many fintechrelated financial products popularised during the 2008 global financial crisis. They offer a decentralised system of value transfer, independent of central banks or governmental authorities. However, their unconventional nature creates significant risks, making proper financial regulation essential. This mini-dissertation focuses on the conduct of business regulation of cryptoassets in South Africa, analysing existing laws such as the Financial Advisory and Intermediary Services Act, the Financial Sector Regulation Act, and the proposed Conduct of Financial Institutions Bill, and evaluating their applicability to cryptoasset service providers. It is argued that the current conduct of business framework lacks the specificity needed to manage the risks cryptoassets present. The EU’s Markets in Crypto-Assets Regulation (MiCA) is used as a case study, as it offers a dedicated legal framework that balances innovation with consumer protection and market integrity. The research also considers the recommendations of the Intergovernmental Fintech Working Group, which call for a risk-based, activity-focused regulatory approach. This mini-dissertation concludes that South Africa would benefit from enacting a dedicated and uniform legislative framework specifically tailored to the conduct of business regulation of cryptoassets. A law modelled on MiCA would reduce legal uncertainty, promote consumer protection, and support innovation in the cryptoasset market