CASP license from PAIRS: why New Africa is one of the most important jurisdictions for cryptobusiness

South Africa is increasingly establishing itself as one of the most promising jurisdictions for crypto businesses in Africa. After the Financial Sector Conduct Authority (FSCA) officially included crypto assets in regulated financial products, companies working with crypto assets began to transition to a fully licensed environment. This is how the CASP (Crypto Asset Service Provider) license was born.

Today, South Africa is no longer perceived as a gray area for crypto. On the contrary, the market is moving toward regulatory transparency, and this is clearly evident in the number of applications submitted. According to the FSCA, hundreds of companies have already applied for CASP licenses, and a significant number have been approved.

What is a CASP license? A CASP is a license for companies providing crypto-related services: exchanges, OTC platforms, custody solutions, crypto consulting, brokerage services, crypto asset management, and other digital asset models. Regulation is carried out through the FSCA under the FAIS Act. In essence, South Africa is creating a clear and internationally recognized model for crypto companies to operate within the regulated environment.

The main advantage is the absence of authorized capital requirements. One of the key advantages of CASPs in South Africa is the absence of strict minimum authorized capital requirements.

This is a very strong argument for crypto businesses, as in many jurisdictions, capital requirements are the main barrier to entry. In some countries, this can amount to hundreds of thousands or even millions of dollars that must be frozen just to maintain a license.

South Africa has a different model. The regulator looks not so much at the formal amount of authorized capital as at the company's overall financial strength, its operational structure, AML/compliance processes, and its actual ability to operate.

This is why this jurisdiction is currently attracting the attention of many international crypto projects seeking regulated status without an excessive initial burden.

What are the main license requirements? It's important to understand: the absence of authorized capital requirements does not mean the absence of regulation.

To obtain a license, a company must establish a fully functional structure:

• a local substance
• director
• AML and compliance functions
• qualified specialists
• accounting and audit support
• internal policies and procedures

The regulator also looks at the company's business model, risk management system, and operational readiness to operate in a regulated environment. It is precisely because of poorly prepared documents or insufficient compliance that some applications in South Africa are rejected.

One of the issues often discussed in South Africa is corporate tax. The corporate tax rate is 27%, but it's important to understand the mechanics correctly. Tax is paid on the company's profits, not on turnover. And with the right structure and sound tax planning, these issues can be managed quite effectively. Therefore, in practice, much depends not only on the jurisdiction itself, but also on how the corporate structure of the business is structured.

Why the market is increasingly looking to South Africa? Today, South Africa is effectively becoming one of the most regulated crypto markets in Africa. And for many companies, this is an opportunity:

• to operate within a regulated framework
• to have a clear licensing status
• to build an international reputation
• to simplify work with counterparties and banks
• to demonstrate a clear compliance model to investors

This is especially relevant for crypto companies wishing to operate not just as a startup, but as a fully-fledged international business.

What is important to consider in practice? In practice, the license itself is only part of the process. The main difficulty usually lies in properly structuring the company: how to register the company

• which operating model to choose
• how to build an AML/compliance framework
• how to work with local substance
• how to properly prepare documents for the regulator

This determines not only the speed of obtaining a license but also the company's continued stable operation.

The Antwort Law team supports international crypto projects and helps build structures for working with digital assets in various jurisdictions.

If you're considering a CASP license in South Africa, it's important not just to submit the documents, but to properly build the entire business model—from corporate structure to compliance and tax planning. We help clients evaluate whether South Africa truly suits their model, what alternatives are available, how to structure their operations correctly, and how to navigate the licensing process without unnecessary risks. We help clients develop a business model that will not simply formally meet requirements but actually work for their business.

Lidia Ivanova

International lawyer
Antwort Law