There are now two contradictory High Court judgments on whether cryptocurrency is “money” or “capital” in terms of the Exchange Control Regulations, adding another layer of uncertainty to the regulation of cross-border transactions involving crypto assets.
In a judgment issued on 1 June 2026, Judge Stuart Wilson, in the High Court in Johannesburg, firmly concluded that cryptocurrency is both “money” and “capital” for the purposes of Regulation 10(1)(c) of the Exchange Control Regulations, 1961.
This finding is contrary to the decision by the High Court in Pretoria in May 2025. Judge Wilson “respectfully” stated that Judge Mandlenkosi Motha’s conclusion in Standard Bank of South Africa v South African Reserve Bank and Others was “clearly wrong”.
Judge Motha’s judgment is suspended pending the outcome of an appeal by the South African Reserve Bank to the Supreme Court of Appeal (SCA).
Read: High Court ruling on crypto exchange control suspended pending appeal
Law firm ENS believes the latest judgment has “serious implications” for the crypto industry and its advisers, while creating further legal uncertainty.
Judge Wilson said the conclusion that cryptocurrency constitutes “money” and “capital” under the Exchange Control Regulations arises from a plain reading and a “reasonable purposive interpretation” of the Regulations.
Citing the SCA in South African Reserve Bank v Leathern NO and Others (2021), he said the Regulations have three purposes:
- “to prevent loss of foreign-currency resources through the transfer abroad of financial capital assets held in South Africa”;
- “to ensure effective control of the movement of financial and real assets into and out of South Africa”; and
- “to avoid interference with the efficient operations of the commercial, industrial, and financial system of the country”.
“On any sensible construction of the facts,” Judge Wilson said, “cryptocurrency is a ‘financial capital asset’ in the sense conveyed here, the unregulated export of which would frustrate each of these purposes. Submissions to the contrary tend to rely on cryptocurrency’s unregulated, intangible, and technological features.
“They entail a degree of magical thinking which misconstrues the nature of money, underplays the destructive effects of unregulated capital flows, and ignores the fundamental purpose of the Exchange Control Regulations.”
Transfer of Bitcoin worth about R182m
In the matter that came before Judge Wilson, the first applicant, Square Mangundhla, used his Luno account and that of the second applicant, Fungai Dangaiso, to transfer approximately 1 680 Bitcoin, purchased in South Africa and worth under R182 million, to Bitcoin wallets accessible only through cryptocurrency exchanges registered outside of the Republic.
It was not disputed that the transactions, which occurred between January 2018 and March 2020, took place or that Mangundhla was behind them. The main dispute in the case was whether Mangundhla had needed National Treasury’s permission to perform the transactions.
SARB’s forfeiture orders
The SARB (first respondent) took the view that Mangundhla’s conduct amounted to the export of the Bitcoin and their rand value, contrary to Regulation 10(1)(c). Exercising his powers under Regulation 22B, the Deputy Governor of the SARB (third respondent) declared forfeit to the state just under R6m in Bitcoin assets and money standing to the applicants’ credit in their respective Standard Bank accounts and Luno trading accounts.
The basis of the forfeiture order was that this money and cryptocurrency was either the proceeds of Mangundhla’s contravention of the Regulations or was itself in the process of being unlawfully exported.
The forfeiture order also relied on the propositions that the transactions amounted to the removal of “securities or foreign currency” from South Africa without Treasury’s permission, contrary to Regulation 3(1)(a), and that the transactions resulted in a “payment to, or in favour of, or on behalf of, a person resident outside” South Africa without Treasury’s permission, contrary to Regulation 3(1)(c).
The applicants asked the High Court to review and set aside the forfeiture orders, principally on the basis that the Regulations do not apply to cryptocurrency transactions. They admitted that they had not obtained Treasury’s permission to perform the transactions. The issue before the Court was whether the transactions amounted to the “export” of “capital”.
Regulation 10(1)(c) provides that “[n]o person shall, except with permission granted by the Treasury and in accordance with such conditions as the Treasury may impose – enter into any transaction whereby capital or any right to capital is directly or indirectly exported from the Republic”.
Why the Regulations apply to cryptocurrency
Judge Wilson held that cryptocurrency is “capital” in terms of Regulation 10(1)(c) even if “capital” is narrowly defined as any financial asset that can hold value or be used as a medium of exchange. He reached this conclusion by applying the established principles of statutory interpretation, considering the ordinary grammatical meaning, context, and purpose of the provision.
He rejected the applicants’ argument that Bitcoin’s unique intangible and technological features place it beyond any sensible definition of “capital”, stating that Bitcoin can be exchanged for fiat currency. In other words, one can buy Bitcoin using rand, hold it in the expectation that its rand price will increase, and sell the Bitcoin at a profit. In some places, Bitcoin is also accepted by merchants as a form of currency.
He further held that the Exchange Control Regulations would be “virtually worthless” if they did not apply to a cryptocurrency such as Bitcoin. This is because anyone who wished to take their money abroad could do so without Treasury oversight simply by converting it into cryptocurrency and transferring it to a foreign cryptocurrency exchange. This would be completely at odds with the underlying purposes of the exchange control regime: to regulate and, where necessary, to curb the outflow of capital.
The applicants’ counsel contended that various reports and issue papers published by entities controlled by or associated with the SARB tend to treat cryptocurrency as a phenomenon that might not be adequately regulated by the Exchange Control Regulations.
Judge Wilson said that what a consultant thinks the regulatory framework covers when they write a report for the government, a parastatal, or a think-tank should exert, at best, only a marginal impact when interpreting the relevant provisions in the Regulations.
Counsel also argued that cryptocurrency could not have been contemplated by the drafters of the Currency and Exchanges Act and the Regulations when they were promulgated in 1933 and 1961, respectively.
Judge Wilson said a legislator or drafter in the early 1930s and early 1960s knew all about the nature of financial assets, negotiable instruments, and fiat currency.
“The Act was drafted during the Great Depression, which was brought on in part by a collapse of confidence in the financial markets. Its drafters would have been keenly aware of just how fungible financial assets can be. If, as I have found, Bitcoin is a kind of financial asset, it would not have been difficult for a reasonably well-informed legislator in the early 1930s to understand its essentials.”
Judge Wilson criticized Judge Motha’s finding for emphasising cryptocurrency’s intangible and technological characteristics (is “nothing more than codes on a digital ledger”; it “exist[s] anywhere and everywhere and [has] a global nature”). This characterisation, he said, overlooked the “real-world consequences of its use”.
He commented: “In my view, courts should be careful not to ascribe unusual or irreducibly exotic properties to phenomena which, though novel and perhaps unique in some respects, exhibit precisely the attributes an enactment is intended to regulate.”
Why the capital was exported
Counsel for the applicants argued that export, per Regulation 10(1)(c), could not have taken place unless the holders of the wallets on foreign exchanges could be identified as resident in a foreign jurisdiction, or it could be established that the Bitcoin was converted to foreign currency in a foreign jurisdiction.
Judge Wilson disagreed, saying once the Bitcoin was placed beyond the Reserve Bank’s jurisdiction, it was exported. The fact that the Bitcoin wallets could be accessed from anywhere in the world, including from within South Africa, did not change that conclusion.
“The starting point is location of the account, not the location of the account holder. A person who goes to an ATM in Johannesburg and draws cash from a bank account held in the United Kingdom clearly imports the money they draw. Conversely, a person who draws money from a South African bank account at an ATM in London clearly exports the money from South Africa.”
Why forfeiture lawfully applied to the wallets
Counsel contended that even if the forfeiture orders were good against the money held in the applicants’ bank accounts, they could not lawfully apply to the Bitcoin in their Luno wallets. This was because the Regulations only authorise the forfeiture of “goods” or “money”, and it was submitted that Bitcoin is neither.
Judge Wilson said the Regulations define “money” to include “any bill of exchange or other negotiable instrument”. The qualities he attributed to Bitcoin were “plainly sufficient” to bring it within the definition of a “negotiable instrument” in that it is no more than a right to be credited a specified sum of Bitcoin, which is itself exchangeable for fiat currency and other things of value.
Even if he were wrong in that regard, Judge Wilson said Bitcoin’s general characteristics bring it “well within any sensible conception of money”. It can be converted into fiat currency. It can be used directly to purchase goods and services from merchants who accept it. It is both a medium of exchange and a store of value.
The judge dismissed the application with costs.
ENS on the implications of the judgment
In its commentary, ENS said the judgment is significant for the following reasons:
- It suggests that, at least where Bitcoin is concerned, courts may be willing to treat crypto assets functionally rather than formally when interpreting older financial legislation. This has immediate relevance not only for exchange control, but also for forfeiture risk, transaction structuring, and the treatment of offshore wallet or exchange arrangements.
- It strengthens the policy direction already visible in National Treasury’s recently published draft Capital Flow Management Regulations, which expressly bring crypto assets within the exchange control framework.
- It narrows the room for arguments based on crypto exceptionalism. “The court’s approach is clear: if an asset behaves like a financial asset, can hold value, and can be used as a medium of exchange to move capital beyond South Africa’s borders, then its technological novelty will not by itself place it outside the law’s reach. That is likely to resonate beyond this case.”
At the same time, the law firm’s commentators said there were limits to what the judgment decided.
“The Court expressly left open whether the transactions also breached Regulations 3(1)(a) or 3(1)(c), and its reasoning is focused primarily on Bitcoin in the context of Regulation 10(1)(c). But even on that narrower footing, the judgment is important. It establishes a strong judicial basis for treating Bitcoin as capital under the exchange control regime and as money for forfeiture purposes,” wrote executives Angela Itzikowitz, Era Gunning, and Arnaaz Camay, and candidate legal practitioner Dylan Martheze.
They highlighted that South Africa now has two competing High Court judgments and interpretations on the same point of law.
Although the later judgment is generally preferred, neither decision is legally binding on the other division. As a result, there is still no authoritative resolution of the issue. Market participants must therefore structure their affairs in the face of conflicting High Court authority.
Until an appellate court settles the question or the Draft Capital Flow Management Regulations are promulgated and place the matter beyond doubt as a matter of legislation, the legal status of crypto assets under the exchange control framework remains genuinely contested.
“The broader message is that South Africa’s legal treatment of crypto assets is becoming less conceptual and based more on the function these assets perform. Courts and regulators appear increasingly concerned with what crypto can do in practice, especially in relation to value transfer and capital movement, rather than whether it fits neatly into legacy labels. For market participants, that makes careful structuring and regulatory analysis all the more important,” ENS said.
Click here to download the judgment.
