May 29, 2024

FATF Travel Rule Compliance Guide for South Africa

FATF Travel Rule Compliance Guide for South Africa
  • The minimum threshold for Crypto Travel Rule in South Africa is R25,000 ($1,357).
  • CASPs must verify and share originator and beneficiary details for regulatory compliance.
  • CASPs need risk-based policies for handling transactions, especially with unhosted wallets, to mitigate financial crimes.

With the majority of adults in Africa not having access to a bank account, cryptocurrency is widely popular in this continent. In sub-Saharan Africa, crypto adoption is among the highest in South Africa.

While cryptocurrency adoption is still in its infancy in the country, the authorities have initiated several initiatives, such as declaring crypto a financial product and implementing regulatory measures, including the FATF Travel Rule.

Background of the Crypto Travel Rule in South Africa

In 2020, changes to the Financial Intelligence Centre Act (FIC Act of FICA), which applies AML/CFT laws in South Africa, aligned its cryptocurrency regulatory framework with that of the Financial Action Task Force (FATF)’s standards on crypto and exchange regulation.

This includes enacting the Crypto Travel Rule, which applies to crypto companies operating inside and outside South Africa. It is also imperative to mention that the Financial Sector Conduct Authority (FSCA) is the one governing the crypto sector in South Africa. 

Key Features of the Travel Rule

South Africa’s IFWG 2020 Position Paper on Crypto Assets mandates the Crypto Travel Rule. According to this, originating and beneficiary Crypto Asset Service Providers or CASPs should obtain, hold, and provide accurate information on their customers.

On April 18, 2024, the FIC published a draft directive regarding the implementation of the “Travel Rule” regarding crypto transfers. The directive's purpose is to ensure that those who engage in crypto transfer activities implement FATF’s recommendations. Those who fail to comply with this directive are subject to an administrative sanction.

The compliance requirement includes conducting customer identification and verification (KYC), developing and implementing a Risk Management and Compliance Programme, training employees, conducting customer due diligence (CDD), keeping accurate records, regularly monitoring for suspicious and unusual activity, and reporting any unusual transactions to the FIC.

Compliance Requirements

Crypto asset service providers (CASPs) must report cash transactions over R25,000 ($1,357). They need to provide the following details: For originators:

  • Full name
  • Wallet address
  • Residential address (if available)
  • Date and place of birth
  • Identity number for South Africans, or passport number for non-residents 

For Beneficiary:

  • Name
  • Wallet address

This data must be verified according to the FIC Act and the CASP’s Risk Management and Compliance Programme.

For cross-border transfers below R5,000 (about $270), CASPs must share the originator's full name and wallet address, along with the beneficiary's name and wallet address, without needing to verify the information unless there are concerns of money laundering or terrorism financing.CASPs must also identify and vet the receiving CASP, ensuring it can protect data confidentiality and isn’t involved in illicit activities. They should not process transfers that cannot meet these security and verification requirements. Moreover, CASPs should have policies to decide when to suspend or reject a transfer that lacks necessary details, with procedures in place for any follow-up actions.

Finally, both originating and beneficiary CASPs are responsible for securely storing this information to ensure record accuracy and protection from unauthorized disclosure. Measures like post-event or real-time monitoring are also used to track transfers that are missing required information.

Impact on Cryptocurrency Exchanges and Wallets

In South Africa, CASPs must register as “accountable institutions.” As of March 2024, the FSCA has approved 59 operating licenses for crypto businesses, with another 262 applications under review.

Exchanges are required to monitor transfers between CASPs and those involving unhosted wallets—where owners control their private keys directly. Following the FIC directive, both the sending and receiving CASPs must develop and maintain risk-based policies for handling transfers to and from unhosted wallets. This includes establishing procedures for gathering additional information on these wallets when there's an elevated risk of money laundering, terrorist financing, or proliferation financing.

Global Context and Comparisons

As a member of FATF, South Africa was greylisted by the international agency in 2023. Since then, it has been working with FATF to strengthen the effectiveness of its AML/CFT regime.

According to the latest FATF report, South Africa has been labeled as “Partially Complaint,” along with Brazil, Denmark, Estonia, Hong Kong, Kazakhstan, Lithuania, the Netherlands, Turkey, and Venezuela, regarding its implementation of the Crypto Travel Rule.

Concluding Thoughts

To dissuade financial crimes and avoid increased monitoring by the FATF, South Africa has created a robust regulatory AML/CFT framework to govern crypto assets. With citizens’ interest in crypto growing and regulators providing a clear set of rules that are challenging to follow, South Africa believes these measures will help it attract more crypto companies and investor attention while mitigating risks.


Q1: What is the minimum transaction amount that triggers the FATF Travel Rule in South Africa?

Transactions over R25,000 ($1,357) must comply with the FATF Travel Rule.

Q2: What information must CASPs exchange under the FATF Travel Rule?

CASPs must exchange detailed information, including the full names and wallet addresses of both the originator and beneficiary.

Q3: What requirements apply to transactions involving unhosted wallets under the FATF Travel Rule?

Transactions involving unhosted wallets require CASPs to implement risk-based policies to identify and mitigate potential financial crimes.

Q4: What is the best Travel Rule solution for VASPs in South Africa?

Shyft Veriscope stands out as the best Travel Rule solution for VASPs in South Africa due to its automated counterparty VASP detection, secure peer-to-peer data transfer without third-party servers, and robust compliance features that align with FATF guidelines.


About Veriscope

Veriscope, the compliance infrastructure on Shyft Network, empowers Virtual Asset Service Providers (VASPs) with the only frictionless solution for complying with the FATF Travel Rule. Enhanced by User Signing, it enables VASPs to directly request cryptographic proof from users’ non-custodial wallets, streamlining the compliance process.

For more information, visit our website and contact our team for a discussion. To keep up-to-date on all things crypto regulations, sign up for our newsletter and follow us on X (Formerly Twitter), LinkedIn, Telegram, and Medium.