The Sarb argued that the transactions effectively exported capital from the country, prompting the Deputy Governor to order the forfeiture of nearly R6m in Bitcoin assets and funds held in the applicants’ bank and cryptocurrency accounts.
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The South Gauteng High Court in Johannesburg has delivered a landmark judgment confirming that Bitcoin constitutes both "capital" and "money" under South Africa’s exchange control regime, a ruling that could have significant implications for cryptocurrency users seeking to move assets offshore.
In a judgment handed down by Judge Stuart Wilson on Monday, the court dismissed an application by cryptocurrency trader Square Mangundhla and Fungai Dangaiso to overturn a South African Reserve Bank (Sarb) forfeiture order linked to the transfer of Bitcoin worth about R182 million to foreign cryptocurrency exchanges.
The court found that the transfers amounted to the export of capital from South Africa without the necessary Treasury approval, in contravention of the Exchange Control Regulations.
“The central question in this case is whether cryptocurrency (in this instance Bitcoin) constitutes either ‘money’ or ‘capital’ for the purposes of section 10 (1) (c) of the Exchange Control Regulations, 1961. I conclude that it is both,” Judge Wilson said.
According to the judgment, Mangundhla lawfully traded cryptocurrency between 2015 and 2017.
However, between January 2018 and March 2020, he used his own Luno account as well as Dangaiso’s account to transfer nearly 1,680 Bitcoin, valued at just under R182m, to wallets accessible only through cryptocurrency exchanges registered outside South Africa.
The Sarb argued that the transactions effectively exported capital from the country, prompting the Deputy Governor to order the forfeiture of nearly R6m in Bitcoin assets and funds held in the applicants’ bank and cryptocurrency accounts.
Central to the case was whether Bitcoin could be regarded as “capital” under Regulation 10(1)(c), which prohibits the export of capital without the National Treasury permission.
Judge Wilson rejected arguments that cryptocurrency’s digital and decentralised nature placed it outside the scope of the regulations.
“It seems to me that Bitcoin is plainly capital in the sense that it is a financial asset that is capable of holding value and being used as a medium of exchange,” the judge said.
The court noted that Bitcoin can be purchased using South African rand, held as an investment and later sold for profit. It also recognised that some merchants accept Bitcoin directly as payment for goods and services.
Judge Wilson warned that excluding cryptocurrency from exchange control regulations would create a major loophole in South Africa’s capital control system.
“Were it otherwise, those controls would be virtually worthless, as anyone of any means 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,” he said.
The judgment also explicitly disagreed with an earlier 2025 High Court ruling which had found that cryptocurrency was neither money nor capital for exchange control purposes.
Judge Wilson said that approach placed too much emphasis on the technological characteristics of cryptocurrency rather than its practical use as a store of value and medium of exchange.
On the issue of whether the Bitcoin had actually been exported, the court ruled that placing the cryptocurrency into wallets held on foreign exchanges was sufficient.
“Plainly, once the Bitcoin was placed beyond the Reserve Bank’s jurisdiction, it was exported,” Wilson said.
The court also dismissed claims that the Sarb investigation and forfeiture process had been procedurally unfair, noting that the applicants had several years to engage with the investigation and more than a month to respond before the forfeiture orders were issued.
In its ruling, the court held that Bitcoin qualifies as money because it functions as both a store of value and a medium of exchange and can be converted into conventional currency. As a result, the forfeiture of the cryptocurrency assets was lawful and the review application was dismissed.
Meanwhile, Treasury last month published the draft Capital Flow Management Regulations of 2026 for public comment, a move that has been particularly welcomed by the burgeoning cryptocurrency sector.
In the 2026 Budget Speech, Finance Minister Enoch Godongwana announced that amendments to the Exchange Control Regulations would be published for public comment.
The amendments would signal South Africa’s aim to modernise and adopt a “positive bias” approach to managing cross-border capital flows, through fewer transaction pre-approvals, a focus on reporting, the surveillance of high-impact and high-risk cross-border transactions, and the combating of illicit financial flows.
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