The Crypto Cleanup: South Africa’s New Bid to Exit FATF’s Grey List

A South African financial intelligence unit has issued a directive obligating digital asset platforms to collect the identities of parties involved in cryptocurrency transactions. Known as Directive 9, the order takes effect on April 30, 2025, and places the burden of identifying and storing this information on digital asset platforms facilitating the transactions.

According to a report, the directive is part of South Africa’s ongoing efforts to be removed from the Financial Action Task Force (FATF) gray list. Inclusion on the FATF gray list can damage a country’s reputation, increase the cost of financial transactions, and lead to higher borrowing costs due to the perceived higher country risk.

As reported by Bitcoin.com News, South Africa was added to the dreaded gray list in early 2023 after the FATF determined the country had not done enough to avoid being listed. An earlier report suggested that South Africa’s October 2022 decision to designate crypto assets as financial products was solely to avoid being added to the list.

However, these efforts failed to satisfy the FATF, which concluded that South Africa needed closer monitoring. Since then, the African nation has taken more steps to get off the list, with the latest Financial Intelligence Centre’s (FIC) directive being one of them. The directive seeks to bring South Africa into compliance with the FATF’s travel rule.

“The primary purpose for implementing the travel rule is to help ensure that the transfer or receipt of crypto assets via CASPs is not used for money laundering, terrorist financing and proliferation financing purposes,” the FIC said.

Some of the new requirements imposed by the unit include the obligation to record the sender’s and beneficiary’s full names, as well as their wallet addresses, if the transaction value is below $277 (5,000 rands). The requirements are more stringent for transactions exceeding the $277 threshold, the report added.

Reacting to the FIC’s directive, Sean Sanders, CEO of Altify, said his company is ready to support regulatory developments but questioned the decision to set the threshold at $277, a figure he described as “the lowest out of any country worldwide.”