Self-custodial wallet / non-custodial software in South Africa
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is conditionally permitted in South Africa without local incorporation, subject to AML obligations and none licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
Key Restrictions
- The publisher must not provide any financial advice, intermediary services, or custodial functions in relation to crypto assets, as those trigger FAIS licensing requirements.
- The software must be non-custodial — the publisher must never hold, control, or have access to user private keys or funds.
- No solicitation or intermediation of crypto transactions on behalf of users is permitted without an FSP license.
Key Risks
- Regulatory ambiguity: the FAIS Act and FIC Act definitions of financial services / accountable institutions are framed around services provided 'to clients' — a pure software publisher with no client relationship may fall outside scope, but this has not been tested.
- Future COFI Bill could expand the scope of conduct obligations to software publishers even without custody.
- SA doesn't clearly distinguish non-custodial wallet software from CASP activities — regulatory creep or enforcement actions remain possible if authorities take a broad interpretation.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
The Financial Sector Conduct Authority declared crypto assets a financial product under the Financial Advisory and Intermediary Services Act 37 of 2002 by General Notice 1350 of 2022, published in Government Gazette No. 47334 of 19 October 2022 and signed by Commissioner Unathi Kamlana, and it licenses crypto asset service providers as financial services providers under that Act.
The Financial Advisory and Intermediary Services Act 37 of 2002 regulates the rendering of advice and intermediary services in relation to financial products, including crypto assets since the declaration of 19 October 2022, and does not reach the issuance of those products, so issuing a crypto asset is not by itself a licensable activity under FAIS.
Crypto assets are a financial product for the purposes of the Financial Advisory and Intermediary Services Act 37 of 2002 because the Financial Sector Conduct Authority, and not the Minister of Finance, declared them so in General Notice 1350 of 2022, Government Gazette 47334 of 19 October 2022, acting under paragraph (h) of the definition of financial product in section 1 of that Act, so a crypto asset service provider must hold an FSP licence.
A crypto asset service provider in South Africa must hold a FAIS financial services provider licence from the Financial Sector Conduct Authority in Category I, II, IIA or III, with approved key individuals and, where required, an approved compliance officer; the fit and proper determination in Board Notice 194 of 2017 sets no rand capital band of R150 000 to R1 000 000 but requires liquid assets of 4/52 of annual expenditure for Category I, 8/52 for Category II and 13/52 for Categories IIA and III, with Categories IIA and III also maintaining assets exceeding liabilities by at least R3 million.
Safekeeping and administration of crypto assets is carried on under the same FAIS financial services provider licence rather than a separate custody licence, and it is separately listed at item 22(d) of Schedule 1 to the Financial Intelligence Centre Act 38 of 2001; every FAIS licensee must operate an internal complaints procedure and its clients may refer unresolved complaints to the Ombud for Financial Services Providers established by section 20 of the FAIS Act.
The Financial Intelligence Centre Act 38 of 2001 governs South African AML/CFT, and crypto asset service providers became accountable institutions at item 22 of Schedule 1 through the Schedule amendment published in Government Gazette 47596 of 29 November 2022 with effect from 19 December 2022, rather than through the General Laws Amendment Act 22 of 2022.
Customer identification and verification.
Standard CDD and Enhanced Due Diligence (EDD) for high-risk cases.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a publisher of non-custodial wallet software does not fall under the FAIS Act's CASP/FSP licensing requirements (which attach to financial advisory, intermediary services, and custody), so no license or AML obligations are triggered, provided the publisher exercises no control over user funds and provides no financial advice or transaction intermediation.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?