South African nailed for trying to move R158 million out of the country
South Africans who use cryptocurrency to move money offshore without approval could face the same consequences as those who illegally transfer millions of rands out of the country through traditional banking channels.
This is the feedback from Tax Consulting SA, which noted that this follows a landmark ruling by the Johannesburg High Court.
The court found that Bitcoin is both “money” and “capital” under South African law and therefore falls within the country’s exchange control framework.
The case centred around a South African man who transferred nearly 1,680 Bitcoin, which he bought in South Africa.
He transferred them to cryptocurrency wallets that he could only access through exchanges outside the country. He did this between January 2018 and March 2020.
According to tax specialists at Tax Consulting SA, the Bitcoin involved was worth about R182 million at the time.
The South African Reserve Bank (SARB) argued that the transactions amounted to the export of both the Bitcoin and its rand value in contravention of South Africa’s Exchange Control Regulations.
The man allegedly used multiple cryptocurrency trading accounts on the Luno platform, including one belonging to a second applicant, to bypass trading limits.
In response, the SARB declared forfeited to the state around R6 million held in cryptocurrency assets, bank accounts and trading accounts linked to the applicants.
The central bank argued that the assets were either proceeds of unlawful conduct or were themselves in the process of being illegally exported.
The men in question challenged the forfeiture order in court, but their application was dismissed by the court.
The ruling is important because it shows that South African authorities and courts consider cryptocurrency to be part of the existing exchange control laws.
Presiding judge Wilson J strongly rejected arguments that cryptocurrency exists outside South Africa’s financial regulatory framework.
He described the suggestion as a form of “magical thinking” that “misconstrues the nature of money, underplays the destructive effects of unregulated capital flows, and ignores the fundamental purpose of the Exchange Control Regulations.”
Ruling sends a clear message
The judge emphasised that the regulations, which were issued under the Currency and Exchanges Act of 1933, exist to prevent South Africa’s financial resources from leaving the country without oversight.
Anyone wishing to move capital offshore must first obtain approval from the National Treasury.
A key aspect of the judgment was the court’s finding that Bitcoin clearly falls within the definition of “capital”.
The court noted that Bitcoin can be bought with rands, held as an investment, sold for profit, and, in some jurisdictions, used to pay for goods and services.
“That, the court said, is capital, regardless of whether it lives on a blockchain rather than in a bank account,” Tax Consulting SA explained.
The ruling arrives as the government moves to tighten regulation of digital assets.
Finance Minister Enoch Godongwana announced during the 2026 Budget Speech that draft regulations are being prepared to formally incorporate cryptocurrency into South Africa’s capital flow management framework.
National Treasury subsequently published the Draft Capital Flow Management Regulations, 2026, for public comment on 17 April 2026.
The proposed rules introduce a more stringent, risk-based approach to managing cross-border crypto transactions, with comments due by 30 June 2026.
The judgment also overturns a perception that cryptocurrency could be used as a loophole to bypass exchange controls.
A month earlier, another Johannesburg High Court ruling involving Standard Bank concluded that cryptocurrency was not capital under the regulations and that the SARB had exceeded its powers.
That earlier ruling was welcomed by many in the crypto industry. However, Wilson J explicitly declared it “clearly wrong”.
The conflicting judgments mean the issue is likely to be decided by the Supreme Court of Appeal, but until then, the latest ruling carries major consequences for cryptocurrency users.
Tax Consulting SA warned that transferring Bitcoin or other digital assets to offshore exchanges or wallets without SARB approval could expose individuals to the same penalties associated with illegal capital flight.
“Your crypto can be seized,” the firm said, noting that the court confirmed the SARB’s power to forfeit cryptocurrency used to circumvent exchange controls.
Tax Consulting SA warned that the ruling sends a clear message that “the blockchain does not put you beyond the reach of South African law.”
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