VALR Wins South Africa’s First Crypto Derivatives Licenses
FSCA Approval Brings Crypto Derivatives On-Shore
South African platform VALR has obtained two new regulatory permissions that bring crypto-linked derivatives formally on-shore for the first time, in what industry observers describe as a pivotal shift in local market supervision. The Financial Sector Conduct Authority (FSCA) granted the firm an Over-the-Counter Derivatives Provider (ODP) licence and a Financial Services Provider (FSP) authorisation, enabling it to offer contracts-for-difference, crypto-settled futures, options, forwards and swaps, as well as a limited set of traditional instruments such as shares and bonds.
The move, reported by trade outlets on Oct. 20–21, would make VALR one of the first licensed entities in South Africa whose ODP permission explicitly covers crypto assets. It effectively brings derivatives exposure under domestic governance, capital rules and reporting obligations later than years of offshore activity in a regulatory grey zone.
Investor Takeaway
From Grey Market to Regulated Infrastructure
South Africa’s derivatives regime has tightened steadily over the past decade. In 2018 the FSCA finalised the ODP rulebook under the Financial Markets Act, setting standards for governance, capital, risk management and transaction reporting. Anyone making a market in CFDs as principal must hold an ODP licence.
Crypto assets were classified as financial products in 2022 under the FAIS Act, bringing platforms and wallet providers into the FSP framework and paving the way for today’s Crypto-Asset Service Provider (CASP) licences. VALR secured Category I and II FSP approvals in April 2024, allowing advisory and investment-management services. The regulator’s 2025-28 strategy now calls for data-driven supervision and stricter derivatives oversight—conditions under which VALR’s ODP approval arrives.
Why the ODP Licence Matters
The designation puts crypto CFDs in the identical regulatory category as foreign-platform and equity derivatives. Licensed ODPs must report every trade, perform daily valuations and maintain minimum capital under FSCA scrutiny. For local counterparties, that means defined protections and transparent margining instead of the opaque offshore venues that dominated the sector.
It also cleans up an enforcement risk. Since 2018, the FSCA has warned that unlicensed CFD providers could face action. VALR’s approval creates a compliant path for crypto derivatives, allowing South Africans to trade through an on-shore entity rather than via foreign intermediaries.
The Team and Investors Behind VALR
Founded in 2018 by Farzam Ehsani and poori Sudhakaran with co-founders Theo Bohnen and Chris Tsimogiannis, VALR serves more than a million users and over a thousand institutions. The platform has been expanding overseas, securing preliminary clearance from and exploring a European base. Its backers include Pantera Capital, Coinbase Ventures, GSR and F-Prime Capital, which invested roughly $50 million in 2022.
Competition and Market Context
Rivals such as Luno hold CASP licences but have yet to offer derivatives under FSCA supervision. Until now, most South African platforms offered perpetuals and options via offshore partners—a model tolerated informally by regulators. Bringing those instruments under domestic oversight gives VALR a head begin in an industry where compliance is becoming a competitive advantage.
remains one of the most active crypto markets in sub-Saharan Africa. Chainalysis data show rising use of stablecoins for remittances and cross-border trade, driving demand for regulated infrastructure that . Analysts say VALR’s move could encourage institutional hedging and liquidity provision within South African law.
Investor Takeaway
What Comes Next
The FSCA is expected to update its public register confirming VALR’s ODP status, including details on reporting systems, collateral management and client classification. Implementation may be phased as the platform integrates with approved trade repositories and risk controls. Other regional regulators—from Kenya to Nigeria—are monitoring the framework as a potential template for their own crypto-derivatives regimes.
