“The legal status is in limbo, and that is precisely the problem,” says Chong, Partner at Webber Wentzel.
The Pretoria High Court ruled earlier this year that cryptocurrencies do not qualify as ‘currency’ or ‘capital’ under South Africa’s exchange control regulations – a decision that has thrown the legal status of crypto assets into uncertainty.
Until the law is amended, the ruling implies that crypto transfers outside South Africa are not covered by exchange control rules. But that’s not the full picture, says Webber Wentzel partner, Joon Chong, who unpacked the implications in a recent podcast interview.
A Legal Battle Between Standard Bank and the Reserve Bank
The case originated when Standard Bank challenged the South African Reserve Bank (SARB) after its Financial Surveillance (FinSurv) unit sought to forfeit more than R16 million belonging to a client under investigation. The client’s company, already in insolvency proceedings, had transferred about 4,400 bitcoin to an exchange in the Seychelles.
The High Court ruled in Standard Bank’s favour, finding that crypto assets fall outside existing exchange control definitions. The SARB has since appealed the ruling, and the matter will be heard in 2026. Until then, the judgment is suspended – meaning crypto transfers abroad are still treated as subject to exchange controls.
“The legal status is in limbo, and that is precisely the problem,” says Chong, Partner at Webber Wentzel.
The High Court’s reasoning was based on the 1961 exchange control regulations, which define “currency” and “capital” in terms of physical money and conventional transfers. The court held that since cryptocurrencies are neither, they fall outside those provisions. This interpretation, Chong notes, aligns with the SARB and Intergovernmental Fintech Working Group (IFWG)’s 2021 position paper, which had recommended that regulations be updated to include crypto assets.
The IFWG, a consortium of financial regulators formed in 2016, urged the government to close the gap in the law – advice that remains unimplemented.
“If we look at the Reserve Bank’s authorised dealers’ manual and its website, they state that banks cannot approve crypto transfers,” Chong explains.
“However, individuals can still buy crypto from abroad using their annual allowances – up to R1 million without tax clearance, or R10 million with clearance.”
FinSurv, however, already treats crypto transfers as if they fall under exchange controls. Contravening these regulations is a criminal offence, creating a contradiction between SARB’s stated position and its courtroom argument.
“If you take the High Court’s view, then crypto asset transfers are not covered. But SARB maintains that they are.”
The case has reignited debate over whether South Africa’s exchange controls – introduced decades ago during apartheid – still serve a purpose. Critics see them as outdated relics of a pre-globalized economy.
Chong draws a comparison to the Mark Shuttleworth case from over a decade ago. Shuttleworth, a billionaire, founder of Thawte, was charged a 10% exit levy when transferring funds abroad after selling his company.
Though he lost his Constitutional Court challenge, the case raised concerns about the Reserve Bank’s expansive powers.
“The Shuttleworth case was about conventional funds and the constitutionality of an exit levy. The Standard Bank case is about definition — does bitcoin, a string of digital code that didn’t exist in 1961, qualify as capital?”
Unlike Shuttleworth’s purely regulatory dispute, the Standard Bank case carries criminal liability and potential asset forfeiture. The 1961 regulations were written for an era of physical currency, border declarations, and bank transfers – not digital assets.
“As the court noted, how do you declare bitcoin at a border? How do you deposit it with authorities?” Chong asks.
“The regulations simply do not contemplate this technology.”
The High Court ultimately held that lawmaking is the role of Parliament, not regulators. Until legislative updates arrive, crypto transfers will remain in a grey area – and the country’s crypto future uncertain.
“Unfortunately, I imagine this uncertainty will persist until the Supreme Court of Appeal hears the matter in 2026,” Chong concludes.
