VALR, a South African cryptocurrency exchange, has achieved a significant regulatory milestone by obtaining dual crypto asset service provider (CASP) licenses from the Financial Sector Conduct Authority (FSCA). This achievement follows the implementation of new regulatory requirements for cryptocurrency firms in the country.

Backed by $55 million in equity funding from investors like Pantera Capital and Coinbase Ventures, VALR is among the first cryptocurrency companies in South Africa to receive both Category I and II CASP licenses from the FSCA.

According to Farzam Ehsani, co-founder and CEO of VALR, obtaining these licenses represents a major step forward for the exchange. He emphasized the company's commitment to compliance, security, and providing a trustworthy platform for the crypto community.

The licensing process began when the FSCA opened applications in June 2023, giving crypto asset service providers six months to apply for compliance with South African regulations. Companies had until November 2023 to submit their applications and would be regulated under the country’s Financial Advisory and Intermediary Services Act.

Ehsani explained the distinction between the two license categories. A Category I license is the standard license required for a CASP in South Africa to provide advisory or exchange services to customers. Meanwhile, a Category II license, or discretionary mandate license, allows customers to authorize licensed providers to use their discretion in managing their portfolios, enabling VALR to explore innovative product offerings such as bundled services.

South Africa became the first African country to formally license cryptocurrency exchanges through regulatory frameworks established since 2021. In March 2024, the FSCA approved 59 license applications from cryptocurrency platforms, with a significant number of applications still under review.

Additionally, in January 2023, the Advertising Regulatory Board updated its requirements to address the growing popularity of cryptocurrency investing. The amended rules aim to protect consumers by ensuring that advertisements clearly state the risks associated with cryptocurrency investments and provide balanced information about returns and risks.