If Berry Max does not register with the FSCA before the cut-off date for the new regulatory framework, the exchanges on the platform will be considered illegal.
Crypto trading platforms like Berry Max have been largely unregulated. But now the Financial Sector Conduct Authority (FSCA) will require that any platform that engages in crypto assets exchanges register as a Financial Services Provider in South Africa or risk doing business illegally.
The implications of Berry Max not being registered in South Africa
Financial watchdogs all around the world have been grappling with how to regulate crypto currencies and other crypto assets for several years now.
Then, in October 2022, the South African Financial Sector Conduct Authority (FSCA) finally made the first big step towards establishing a regulatory framework for crypto assets.
The FSCA has now declared crypto assets a financial product under the FAIS Act. This means that all kinds of crypto assets now fall under the FSCA’s jurisdiction and need to be licensed with the FSCA as Financial Services Providers before 20 November 2023.
Berry Max (also known simply as Berry.im) is one of many crypto trading platforms that are not yet registered with the FSCA. If this continues to be the case after this cut-off date, the platform will be doing business illegally.
Does Berry Max have to register with the FSCA?
The FSCA has been deliberately broad with their definitions for this new regulatory framework since the online crypto asset world is so complex and is constantly shifting.
Under this framework, any digital representation of perceived value is considered to be a crypto asset.
Furthermore, any individual or platform that buys or sells crypto assets on behalf of clients, swaps one kind of crypto asset for another, or transfers a crypto asset to another account is considered a crypto exchange.
Berry Max definitely falls into this category and thus, will need to register with the FSCA before time runs out.
Why so many crypto platforms have not registered yet
The world of crypto trading has been largely unregulated for the most part, and it will take some time for most crypto trading platforms to adjust to this new regulatory framework.
In fact, over the years, many experts have speculated that the administrative burden of complying with such frameworks may be enough to take out smaller platforms entirely.
What will this new regulatory framework really do?
Although this new regulatory framework may seem like a big step, it is important to keep in mind that the FSCA does not intend to legitimise any of the crypto assets that are being traded.
The regulatory framework simply aims to protect customers and brokers from scams and prevent theft and money laundering in the future.
