Navigating the cryptocurrency landscape: Insights from Binance's Hannes Wessels

IN A WIDE-ranging interview, Hannes Wessels, General Manager for Southern and Francophone Africa at Binance, the world’s largest crypto exchange by trading volume, said while South Africa's conduct regulator, the Financial Sector Conduct Authority (FSCA), has made strides by extending existing financial advisory frameworks to crypto firms, the process remains under-resourced and delayed.

- PHILIPPA LARKIN

"I do believe, though, that a lot more work needs to happen to tailor regulation specifically for crypto asset service providers because our business is very different from, say, insurance brokers," he said.

“We're in the last batch of firms still waiting for our crypto license approval,” Wessels said. “The FSCA has good people who know what they're doing, but they’re simply under-resourced. You can only do so much with the bandwidth you have.”

Wessels touched on the case of Standard Bank. Last month in a judgment handed down in the North Gauteng High Court, Judge Mandlenkosi Motha ruled that the Exchange Control Regulations, introduced in 1961, cannot be applied to cryptocurrencies. In his judgment, he wrote “a regulatory framework addressing cryptocurrency is long overdue”. He noted there is a clear lack of regulation of digital assets, despite their existence since 2009.

The case in front of the High Court involved Standard Bank, against the South African Reserve Bank (SARB) and others, and focused on whether crypto-currencies such as Bitcoin fall within the scope of the existing exchange control regulations. Judge Motha noted that the existing regulations do not permit “an unnatural and fictitious reading” to include cryptocurrencies.

Wessels said, "As we saw in the Standard Bank judgment, the judge was quite clear in saying the SARB didn't move fast enough in the treatment of crypto assets as an exchange-controlled asset."