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.
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.
