Sumsub urges South African firms involved in crypto transactions to seriously consider Travel Rule requirements 

29 April, Johannesburg - Cryptocurrency services may soon find themselves facing increased scrutiny and stringent information-reporting obligations under a planned directive by South Africa’s Financial Authorities.

A proposed directive by the FIC (Financial Intelligence Centre) calls for Crypto Asset Service Providers (CASPs) and intermediaries facilitating crypto transfers to face tougher new requirements for client information collection and sharing on transactions above R5000. The directive introduces a ‘travel rule’ mandating CASPs and crypto asset financial service providers (FSPs) to exchange specific information during digital asset transactions.

Sumsub, a global full-cycle verification platform with over 2000 clients in the crypto, fintech and e-commerce industries has commented on the planned directive.  Hannes Bezuidenhout, Sumsub’s VP of Sales for Africa, said:

The implementation status of the Travel Rule in South Africa has been in limbo for a long time. Finally, the recently-published consultation document, a directive, showed the fundamental requirements and conditions of the Travel Rule, such as collecting information, verifying it and promptly transmitting it to the counterparty, as well as conducting due diligence on the ordering CASP counterparty. In light of this, it is imperative that South African firms involved in crypto transactions seriously consider the Travel Rule requirements.

“However, there are several unclear points in the Directive that do not appear to be covered by the consultation part. In particular, CASPs may face ambiguity surrounding differences in "domestic" and "cross-border transfers" requirements. Such differences affect most requirements in the Directive, such as the scope of the data to be transferred, actions for monitoring missing/ incomplete information, the necessity to check the accuracy of beneficiary information and more.

"Preparing for compliance is crucial. While the consultation phase is underway, requirements may still change, therefore CASPs should not ignore the opportunity to participate. However, as the main direction of the requirements is already clear, firms must be ready to implement solutions which are able to identify CASP-to/from-CASP and CASP-to/from unhosted wallet transactions. These solutions should also be able to determine the recipient CASP, carry out counterparty due diligence, and screen for sanction breaches. The onus is also on crypto platforms to pay attention to whether the Travel Rule solution provider can ensure data protection during transmission.”

About Sumsub

Sumsub is a full-cycle verification platform that secures the whole user journey. With Sumsub’s customisable KYC, KYB, Transaction Monitoring and Fraud Prevention solutions, you can orchestrate your verification process, welcome more customers worldwide, meet compliance requirements, reduce costs, and protect your business.Sumsub has over 2,000 clients across the fintech, crypto, transportation, trading, e-commerce and gaming industries including Binance, Mercuryo, Bybit, Huobi, Unlimit, DiDi, Poppy and TransferGo.

-- END -- 

For media inquiries or interview requests, please contact: Nomsa Mdhluli I Nomsa Mdhluli | +27 71 628 6231