Top cryptocurrency exchanges in South Africa
South Africans looking to invest in or trade cryptocurrency will find plenty of well-established crypto exchanges at their disposal.
Despite what detractors say, Bitcoin and several other major coins have seen their values increase substantially over the long term.
That has benefited early adopters and the so-called crypto “hodlers” — those dead set on keeping their investments despite extreme price changes.
Nevertheless, the collapse of the once-giant FTX and alleged fraudulent schemes like Mirror Trading International (MTI) mean those interested in crypto must carefully consider what platforms they use to trade in and store their crypto.
Cryptocurrency also offers the benefit of self-custody, allowing people to take personal responsibility for safeguarding their digital assets.
You can buy cryptocurrency on a well-established exchange and then transfer it to your private wallet for safekeeping.
Among the faithful, there is a maxim: “Not your keys, not your crypto.”
In other words, if you don’t control the private encryption keys to a cryptocurrency wallet, then you don’t actually own the coins and tokens stored in that wallet.
However, self-custody requires good security hygiene.
You must avoid viruses and phishing scams, and preferably use safe offline storage for any passphrases (also called seed phrases) used to back up and recover wallets.
In recent years, there has been intensified regulatory scrutiny of the industry, globally and in South Africa.
But many blockchain and cryptocurrency advocates see this as a positive step towards legitimising the technology for more widespread adoption.
Finance minister Enoch Godongwana recently amended an annexure to the Financial Intelligence Centre Act (FICA), making crypto asset service providers in the country “accountable” institutions.
That means they will be required to collect and store data such as customers’ identity documents and proofs of address to help prevent users abusing crypto for money laundering and other illegal activities.
The cryptocurrency exchanges listed below already implement many of the “know your customer” procedures associated with FICA.
Aside from FICA, the Advertising Regulatory Board has also added rules for advertising cryptocurrency products to protect consumers from unethical marketing promising unrealistic returns.
That initiative was spearheaded by one of South Africa’s biggest cryptocurrency exchanges — Luno.
Several financial institutions and large companies across the globe are also looking at ways to implement blockchain in their systems.
There have been some local developments that suggest there is a significant appetite for crypto in South Africa too, including Pick n Pay accepting Bitcoin payments.
While the cryptocurrency market has plunged in the past year, the same can be said for the broader financial market.
Based on the continued developments and general interest in cryptocurrency in recent months, it would seem like the technology is far from dying.
Below are five of the top cryptocurrency exchanges you can use to get into the market. Always be aware, however, that investing in crypto assets may result in the loss of capital.
Binance
The world’s biggest cryptocurrency exchange by trading volume — Binance — has an official presence in South Africa.
In 2022, the company hired former HSBC South Africa global banking head Hannes Wessels to serve as South African country lead.
Binance offers an extensive suite of cryptocurrency-related features, including general trading, derivatives, futures, financing, and NFTs — catering to the needs of newcomers and seasoned cryptonians alike.
It boasts over 120 million registered users and supports over 350 cryptocurrencies.
Among its useful features for local crypto enthusiasts is making direct manual bank deposits using rand.
Binance says it publishes internal audits, verified by third-party auditors using cryptographic techniques, known as a Merkle-tree-based “Proof of Reserves” system.
Luno
Luno is one of South Africa’s most widely-recognised cryptocurrency exchanges and has become a major international success.
Founded as BitX by Marcus Swanepoel, Timothy Stranex, Pieter Heyns and Carel van Wyk, the company aims to make cryptocurrency investments simple and accessible to the everyman.
Since starting in South Africa in 2013, Luno quickly expanded its team to nine offices in eight countries — including the UK, United States, Australia, and Singapore.
It has roughly 10 million customers in over 40 markets across Africa, North America, Europe, and Asia and offers eight crypto coins and 51 trading pairs.
Luno’s impressive growth led to the Digital Currency Group (DCG), the world’s biggest venture capital company focused on the digital currency market, acquiring it in September 2020.
DCG also owns major international players like CoinDesk, Foundry, Genesis, and Grayscale Investments.
The exchange publishes a “Proof of Reserves” report on its website on a quarterly basis.
This document is based on an assessment by independent auditing firm Mazars, which gives some assurance that the exchange’s customer wallets actually contain the amount of cryptocurrency users hold.
Ovex
Ovex was founded by Tom Masojada, Jonathan Ovadia, and Nikhar Ramchunder in 2017 and operates out of Cape Town.
It specialises in over-the-counter (OTC) trading off open exchange order books, particularly suited to institutions and high net-worth individuals that want to make high-volume trades.
One of Ovex’s primary products is an interest-bearing account that offers customers up to 8.5% annual interest on certain cryptocurrencies.
The interest is paid out in the cryptocurrency deposited into the account, so the prices of the coin at the points of deposits and withdrawal determine your actual return.
Ovex also operates a foreign exchange service for businesses and individuals wanting to buy or sell fiat currency.
It has also undergone a “Proof of Reserves” assessment by Mazars.
Revix
Founded in 2018, Revix’s intention is to make crypto trading safer, faster, and easier. It focuses primarily on young, independent retail investors.
One of Revix’s headline features is its bundles, which combine allocations of multiple cryptocurrencies.
It also offers a USD Savings Vault that allows users to deposit USD stablecoins and earn interest on an annualised rate of 9.25%.
The company plans to launch themed investment bundles in various tech fields later in 2023.
These themes include artificial intelligence (AI), esports and gaming, biotech, cybersecurity, electric vehicles, and robotics and automation.
Revix was the first exchange to publish a “Proof of Reserves” report based on an assessment by Mazars. It now does so every quarter.
VALR
After launching in 2018, VALR quickly became the biggest cryptocurrency exchange still headquartered in South Africa.
Among its many investors are Michael Jordaan’s Montegray Capital and US cryptocurrency exchange Coinbase. It is also partnered with Bittrex.
As of December 2022, VALR reported having over 350,000 individual customers and 800 corporate clients.
VALR’s offerings are fairly straightforward, with customers able to buy, sell, transfer, and store cryptocurrency and other digital assets.
It also essentially pays users who add liquidity to its exchange by charging negative “market maker” fees.
VALR also has VALR Pay, which lets users send cash or crypto to one another using a mobile number or email address.
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