High Court declares Crypto not governed by Exchange Control Regulations
In a judgment delivered on 15 May 2025, the Gauteng High Court ruled that South Africa’s Exchange Control Regulations do not extend to cryptocurrency transactions under current law.
Standard Bank of South Africa Ltd v South African Reserve Bank (SARB) dealt with the forfeiture of R16.4 million in a Standard Bank Money Market account and R10 million in a Nedbank account, following SARB’s investigation into cryptocurrency outflows involving the now liquidated, Leo Cash and Carry (LCC), a wholesale trading business in Rustenburg. LCC maintained a business current account and a money market account with Standard Bank. In December 2019, LCC obtained an overdraft facility from Standard Bank, secured by the funds in its Money Market account. In 2020 LCC moved R15 million from its current account into the Money Market account and used R10 million of that to repay an overdraft owed to Nedbank.
The Court’s Findings
Standard Bank lacked legal standing (locus standi in judicio) to apply for the setting aside of the forfeiture order in relation to the Nedbank account and Standard Bank’s application in this respect was accordingly dismissed.
However, the court set aside the forfeiture of the R16.4 million held at Standard Bank, ruling that cryptocurrency is not regarded as “currency” or “capital” under Regulations 3(1)(c) or 10(1)(c).
Judge Motha referred to an academic paper by SARB, which described cryptocurrencies as digital codes not tied to any specific country, unlike national currencies. Motha further highlighted the need for revisiting the legal definition of “currency” to help determine a company’s compliance with exchange control regulations.
The court further referred to SARB’s own academic position paper published in 2020 which stated “Exchange control regulations do not govern the transfer of cryptocurrencies in and out of South Africa. Any cross-border exchange can therefore not be authorised by SARB,” affirming the finding that SARB lacked legal basis to forfeit the funds.
Impact
South Africa’s regulatory architecture hasn’t transformed fast enough to address the full complexity of crypto activities.
Crypto assets service providers should, despite the regulatory lag, continue to comply with Financial Intelligence Centre Act (FICA) and the Financial Advisory and Intermediary Services Act (FAIS Act), which still apply to crypto activities.
The judgment limits the SARB’s authority to unilaterally block or forfeit crypto-related funds without a proper legal foundation and within the context of the current legal definitions.
Legislative reform is urgently needed to bring clarity and enforceability to crypto governance since the court indirectly called on regulators to develop specific crypto exchange controls.
SARB has filed an appeal, but will it succeed?
SARB has since lodged an appeal, however, given the court’s emphasis on strict interpretation of current punitive regulatory frameworks, and its call for legislative clarity rather than judicial overreach, it is uncertain whether the appeal will be successful.
