South African Court Confirms Crypto Can Be Seized Under Exchange Control Rules

What to Know

• A Johannesburg High Court ruled that Bitcoin qualifies as both “money” and “capital” under South African law, meaning crypto transactions fall under the country’s exchange control regulations.
• The case involved Square Mangundhla, who transferred nearly 1,680 BTC to offshore exchange-linked wallets between 2018 and 2020 without approval.
• The SARB seized about R6 million in Bitcoin and fiat assets, and the court upheld the forfeiture.
• The court found that moving crypto offshore without permission from the National Treasury/SARB constitutes an unauthorised export of capital and may result in asset forfeiture and other penalties.
• The ruling strengthens South Africa’s push to regulate crypto under existing capital control laws and aligns with the proposed Draft Capital Flow Management Regulations 2026.
• Legal uncertainty remains because the judgment directly contradicts a 2025 Johannesburg High Court ruling that found crypto was not “capital” under the regulations.
• The conflict may ultimately need to be resolved by the Supreme Court of Appeal.

A Johannesburg High Court judgment handed down on 1 June 2026 has settled and raised consequential questions for South Africa’s crypto market. 

According to the ruling, Bitcoin is “money” and “capital” under South African law, and moving it offshore without regulatory approval is illegal. It could carry the same penalties as unauthorised foreign currency transfers, including asset forfeiture.

What Happened

Between January 2018 and March 2020, a crypto user, Square Mangundhla, transferred just under 1,680 Bitcoin to wallets accessible only through cryptocurrency exchanges registered outside South Africa.

He used trading accounts on Luno, including one belonging to a Fungai Dangaiso, who is also named in the case, to work around trading limits.

The South African Reserve Bank (SARB) treated the transfers as unlawful offshore capital exports under the Exchange Control Regulations.

The SARB’s Deputy Governor seized and permanently kept about R6 million in Bitcoin and fiat funds from two individuals’ bank and crypto accounts. Mangundhla and Dangaiso challenged the forfeiture and lost.

What the Court Ruled

Presiding Judge Wilson J was unsparing in his assessment of the argument presented by their legal counsel, that crypto sits outside South Africa’s financial laws. 

The judge called it “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.”

The Exchange Control Regulations, issued under the Currency and Exchanges Act of 1933, require anyone wishing to move capital abroad to obtain permission from the National Treasury.

According to the ruling, Bitcoin fits squarely within the definition of “capital.” Capital here is defined as any financial asset that can hold value or serve as a medium of exchange. Bitcoin fits that mould.

The fact that Bitcoin lives on a blockchain rather than in a bank account, the judge ruled, changes nothing about its legal character.

Why This Ruling Matters

The ruling carries implications well beyond those directly involved. It confirms that offshore crypto transfers require SARB approval, just as wiring large sums to a foreign bank account does. Assets used to sidestep those rules can be forfeited to the state.

For crypto exchanges and licensed Crypto Asset Service Providers (CASPs), this indicates cross-border digital asset flows now carry the same regulatory weight as conventional foreign currency transactions. Their compliance frameworks will need to reflect that.

In April 2026, the National Treasury published the Draft Capital Flow Management Regulations, 2026, for public comment.

The Draft Capital Flow Management Regulations, if passed, will formally bring crypto assets into South Africa’s capital flow management regime.

The Mangundhla ruling, arriving just weeks later, adds judicial momentum to what was already a legislative trend.

A Conflicting Judgment Creates Uncertainty

The implication of this judgment contradicts another ruling. A little over a year ago, in May 2025, a different Johannesburg High Court judge presiding over a case involving Standard Bank reached the opposite conclusion.

Judge Motha found that cryptocurrency did not qualify as capital under the regulations and that the SARB had exceeded its authority. The crypto industry had welcomed that decision.

Wilson J explicitly declared that ruling “clearly wrong.” The discrepancy will likely need to be escalated to the Supreme Court of Appeal. Until then, a degree of legal uncertainty remains.

The Broader Pattern of Crypto Rulings Across Jurisdictions Worldwide

South Africa’s approach to this question reflects a broader tension playing out across jurisdictions worldwide. Regulators are generally not trying to ban crypto but fold it into existing financial laws that govern capital movement.

The challenge is that blockchain-based assets have no inherent borders; value can move across jurisdictions in seconds, without passing through a bank or triggering a traditional compliance check.

The Mangundhla ruling signals that South African courts are no longer willing to treat that technical reality as a legal exemption. The blockchain, the judge effectively said, does not place you beyond the reach of exchange control law.

For traders, investors, and fintech builders operating in South Africa, the message is that cross-border crypto activity now carries material legal risk without prior SARB approval, irrespective of how the asset is denominated or where it is held.