Just two weeks after a landmark Pretoria High Court ruling found that cryptocurrencies are not subject to South Africa’s exchange control regulations, the South African Reserve Bank (SARB) has filed an appeal to overturn the decision.
The central bank says the court made an error by ruling that crypto assets are not “money” or “capital” in the context of exchange controls, effectively creating a loophole that could allow unlimited funds to be exported via cryptocurrencies.
REGULATION | South African High Court Rules Cryptocurrencies Not Subject to Capital Controls
The case originated when @StandardBankZA sued the @SAReserveBank for seizing ~$1 million from a Standard Bank account.
The central bank lost the case.https://t.co/k6ktdNRCep pic.twitter.com/2aPtq4QkiY
— BitKE (@BitcoinKE) May 26, 2025
READ: SA High Court Rules Crypto Not Subject to Capital Controls
______________________
TL;DR
SARB has appealed a High Court ruling that crypto is not subject to exchange control laws.
The case originated from a dispute involving Standard Bank and Leo Cash and Carry.
SARB claims the court erred in its legal interpretation and failed to apply key regulations.
The appeal could pave the way for legal reforms explicitly targeting crypto.
______________________
The May 2025 ruling came in a case brought by Standard Bank against the SARB, the Minister of Finance, Nedbank, and the liquidators of Leo Cash and Carry (LCC). The dispute arose after Standard Bank attempted to recover funds it had loaned to LCC prior to its 2022 liquidation.
LCC drew the attention of SARB’s Financial Surveillance (FinSurv) department when it was found to have transferred over 4,400 BTC (worth R556 million at the time) from the South African crypto exchange, VALR, to Seychelles-based exchange, Huobi Global.
The court ruled that it would not reinterpret exchange control laws to include crypto within the definition of “capital,” effectively concluding that LCC had not violated any regulations by sending bitcoin offshore.
SARB Strikes Back: Cryptocurrency Is Capital
In its June 3 2025 appeal, SARB argues that the court misinterpreted existing regulations:
Cryptocurrencies are money or foreign currency, SARB claims, and therefore fall under exchange control rules.
The central bank insists the High Court erred in not applying Regulation 22C, which permits SARB to block transactions where exchange control violations are suspected.
Despite the court acknowledging that LCC was a conduit for moving funds out of South Africa, it failed to recognize this as a breach of capital export laws.
The South African Reserve Bank to Introduce New Crypto Rules to Stop Currency Controls: https://t.co/2gJErCSML5 @SAReserveBank #CryptoSA #BitcoinKE
— BitKE (@BitcoinKE) December 2, 2019
What Was at Stake?
Standard Bank won a portion of its case, including the reversal of a R16.4 million forfeiture by FinSurv. However, it failed to recover R10 million paid by LCC to Nedbank.
SARB’s appeal not only challenges the ruling but also signals its intention to potentially amend existing regulations to explicitly classify crypto assets as “capital” or “foreign currency.”
South Africa’s Financial Regulator, FSCA, Declares Crypto Assets as a Financial Product
A crypto asset is used as an investment vehicle… and it resembles a financial product – you invest in it, you get returns from it.” – FSCAhttps://t.co/FOAe4pMmy3
— BitKE (@BitcoinKE) October 21, 2022
Industry Reaction
According to Harry Scherzer, CEO of Future Forex:
“It was relatively clear that the Reserve Bank made an error in allowing a loophole that would essentially make exchange control irrelevant. People could take out as much money as they wanted via crypto.”
Scherzer welcomed the speed of the appeal:
“We always expected this would be corrected. If South Africa wants comprehensive exchange control laws, crypto can’t be a backdoor for unmonitored capital flight. We’re effectively back to the status quo.”
Follow us on X for latest posts and updates
Join and interact with our Telegram community
________________________________________
