 has introduced Directive 9 for financial transparency and combating illegal activities.){kind=link}
South Africa’s Financial Intelligence Centre (FIC) has introduced Directive 9, requiring cryptocurrency platforms to identify parties involved in transactions.
This aligns with the Financial Action Task Force’s (FATF) “travel rule,” aimed at improving financial transparency and combating illegal activities such as money laundering, terrorist financing, and the spread of weapons of mass destruction.
What is Directive 9?
Directive 9 mandates that crypto asset service providers (CASPs), including exchanges and wallets, must collect and store detailed information about both the sender and recipient in cryptocurrency transactions. This data must be accessible to authorities upon request, ensuring traceability and adherence to global financial regulations.
The travel rule requires the disclosure of specific identifying details—such as names and addresses—about the sender and recipient in crypto transactions. The goal is to create a transparent financial flow, helping authorities trace illicit activities.
The FIC emphasized that this rule protects cryptocurrency platforms from misuse for unlawful purposes, such as money laundering and terrorist financing. According to the FIC, this will strengthen South Africa’s ability to monitor crypto transactions, ensuring compliance while tackling illicit financial activities.
Directive 9 will take effect on April 30, 2025, giving crypto platforms time to update their systems to comply with the regulations. This is a critical step in aligning South Africa’s crypto framework with global standards, particularly those of the FATF.
South Africa on the FATF’s Greylist
In early 2023, South Africa was placed on FATF’s greylist, signalling inadequate anti-money laundering (AML) and counter-financing of terrorism (CFT) measures. Greylisting can have severe implications, including difficulties in international trade and finance.
To address these challenges, South Africa has taken proactive steps, such as recognizing crypto assets as financial products in October 2022, to avoid further repercussions and work toward removal from the greylist.
Directive 9 also affects how cryptocurrency can be used across various sectors in South Africa. The country has seen a rise in using digital assets for real estate purchases. These new regulations provide a secure and compliant framework, enabling crypto holders to convert their assets into property ownership.
South Africa is positioning itself as a compliant and secure hub for cryptocurrency activities. While Directive 9 requires significant adjustments from crypto service providers, it is expected to enhance the country’s credibility in the global crypto market, making it more attractive to investors and businesses.