South Africa's financial regulator has kicked off the process of granting crypto licenses, with major players Luno and Zignaly being among the initial recipients of approvals.

The country’s largest and oldest crypto-asset service provider Luno announced its approval as a financial service provider under the country's Financial Advisory and Intermediary Services Act, 2002 (FAIS). The company, now listed as Luno PTY LTD, is officially recognized on the Financial Sector Conduct Authority's registry.

Zignaly, on the other hand, disclosed that it had secured a Category 2 - Discretionary Financial Service Provider (FSP) license, operating under the name Merritt Administrators PTY LTD in the FSCA registry. Additionally, Zignaly recently sealed a significant $50 million financing deal with a Luxembourg-based fund.

Beginning in June 2023, the South African regulatory body started accepting licensing applications from crypto firms following the enactment of legislation to bring crypto activities under regulatory oversight. The FSCA has warned of severe penalties for companies operating without the necessary approvals.

It is anticipated that approximately 60 firms will receive approval from the regulator in the short term.

“This is a positive step for both the cryptocurrency industry and South Africans. Compliance, safety and security for our customers have driven our growth since the beginning and will continue to be priorities as we expand our offering to introduce more features and products for financial institutions,” Christo de Wit, Luno’s country manager for South Africa, said in a statement.

Zignaly also views this license as a strategic move to proactively address potential regulatory expansions into decentralized finance