A landmark South African court ruling exempts crypto from exchange controls, triggering potential capital flow shifts and regulatory urgency.
In a major ruling last week, South Africa’s High Court declared that cryptocurrencies fall outside the country’s exchange control laws, setting a significant legal precedent. The decision came as Standard Bank challenged the South African Reserve Bank (SARB) over R16.4 million (~$1 million) it had forfeited from a client account involved in offshore crypto transfers.
Why It Matters
The court ruled crypto is not “money” or “capital” under existing law.
SARB lost because the judge interpreted the law narrowly, stating:
“Cryptocurrency is not money. It’s merely code on a digital ledger.”
The implication? Crypto can’t be seized under exchange control rules—unless laws are updated.
Background
In 2019, SARB seized funds linked to Leo Cash and Carry, a company that bought R556 million (~$37 million) in Bitcoin and moved it offshore. SARB invoked exchange control rules—but the judge ruled those rules don’t apply to crypto.
Broader Impact
• Short-term crypto surge expected in South Africa.
• Bitcoin premiums could emerge as people move money offshore using crypto.
• Central banks may rush to revise outdated legislation, a point the judge emphasized:
“Crypto has existed for over 15 years—SARB can’t claim surprise.”
Ironically, Standard Bank’s win may backfire—a spike in crypto buying could hurt deposits far more than the R16.4 million at stake.
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