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FIC: Draft Directive 9 on the travel rule relating to crypto asset transfers
- 25 April 2024
- Regulatory Compliance and Legislation
- South African Accounting Academy
The purpose of this draft Directive is to ensure that such accountable institutions that provide or engage in activities of crypto asset transfers, implement the requirements of Recommendation 16 of the Financial Action Task Force (FATF) in the context of crypto asset transfers.
This requirement to implement the travel rule is in line with the anti-money laundering, combating the financing of terrorism and financing of proliferation (AML, CFT and CPF) international standards set by the FATF.
The FIC is now inviting written comments, in particular from accountable institutions listed under items 12 and 22 in Schedule 1 of FICA that engage in crypto asset transfers for or on behalf of their clients on:
- Draft Directive 9, which relates to the implementation of the travel rule regarding crypto asset transfers; and
- The questions posed in the consultation paper on the implementation of the travel rule for those accountable institutions that engage in crypto asset transfers (see especially page numbers 7 to 9 in the consultation paper).
This Directive will become effective on the date of publication in the Gazette.
A crypto asset service provider that fails to comply with a provision of this Directive is non-compliant and is subject to an administrative sanction in accordance with section 45C of the FIC Act.
Comments must reach the FIC by no later than close of business on Friday, 31 May 2024 via email to [email protected].
Access the following related documents here:
- Website notice requesting comments: https://www.fic.gov.za/wp-content/uploads/2024/04/Website-notice-Draft-Directive-9-on-the-travel-rule-relating-to-crypto-asset-transfers.pdf
- Consultation paper: https://www.fic.gov.za/wp-content/uploads/2024/04/Consultation-paper-Draft-Directive-9-on-the-travel-rule-relating-to-crypto-asset-transfers.pdf
Click here to download the Draft Directive:
Relevance to Auditors, Independent Reviewers & Accountants:
- FICA is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer and accountant, you need to be aware of directives issued by the FIC that apply to your clients.
- This directive is applicable to those clients that are accountable institutions (particularly if listed under items 12 and 22 in Schedule 1 of FICA) that provide or engage in activities of crypto asset transfers for or on behalf of their clients.
Relevance to Your clients:
- An accountable institution (particularly if listed under items 12 and 22 in Schedule 1 of FICA) that provides or engages in activities of crypto asset transfers for or on behalf of their clients, must comply with this Directive, otherwise they could be held liable.
- As legislation, regulations and laws are continuously changing and evolving, it is of utmost importance for accountable institutions to continue to meet their FICA obligations.