Beatrix van der Spuy, Consultant Attorney, and Vaughn Harrison, Senior Attorney, at Thomson Wilks

The rise of cryptocurrencies – or crypto – combined with a recent landmark court ruling and SARS’s intensified compliance drive, have created both opportunity and uncertainty. If you manage cross-border flows, offshore investments, or crypto holdings, understanding this evolving landscape has become essential.

The Pretoria High Court ruling: A temporary loophole

In May 2025, the Pretoria High Court handed down a landmark judgment in Standard Bank v South African Reserve Bank. The Court ruled that cryptocurrencies do not constitute capital under South Africa’s Exchange Control Regulations of 1961.

This ruling implies that no SARB approval is currently required to move crypto offshore, and that businesses and individuals can export crypto without triggering the need for exchange control approvals. However, this reprieve is likely temporary.

A useful precedent comes from the Oilwell v Protec case reported in 2011, where the courts held that intellectual property was not capital under the same regulations. Within 15 months, the regulations were amended to explicitly bring IP within scope. We can expect a similar response here, and the Reserve Bank and National Treasury are already drafting amendments to close this loophole.

The shift of compliance and enforcement focus from SARB to SARS

Historically, the South African Reserve Bank (SARB) has controlled foreign currency flows via strict exchange control approvals. Once-off permissions were usually granted by authorised dealers – primarily commercial banks – and SARB seldom revisited these approvals.

That model is changing and, increasingly, the South African Revenue Service (SARS) is becoming the central enforcement authority. South African residents are now taxed on their worldwide income, and not just locally sourced income. Capital gains tax (CGT) now applies to crypto disposals, even if crypto is moved offshore, and annual tax returns include detailed questions enquiring whether the taxpayer has bought or sold crypto, the value of the transactions, and whether the gains have been declared and tax paid on them. Failing to disclose crypto activity now risks penalties, interest, and even criminal sanctions.

Exchange control in the digital age: Cracks in the system

South Africa’s exchange control regulations were born in 1961: introduced during a politically turbulent era to stem capital flight following the Sharpeville tragedy. Designed for an analogue economy built on cheque books and offshore trusts, they are increasingly difficult to enforce in today’s borderless, digital economy. New realities are undermining the traditional framework:

• Mobile-based transfer platforms (e.g. M-Pesa in Kenya) which move billions on a peer-to-peer basis outside traditional banking platforms.
• Stablecoins and other crypto assets allow instant, often anonymous cross-border flows.
• Even minors can open global accounts or buy crypto or overseas products such as running shoes using a parent’s credit card.

Enforcement is becoming technically complex and resource-intensive, and authorities are scrambling to update regulations, but crypto fundamentally challenges the old system. It’s becoming increasingly difficult to enforce traditional exchange controls and day-to-day compliance, and enforcement is moving further from the SARB and its authorised dealers.

The new focus is on tax compliance as the control lever, and SARS has signaled its intent to double its compliance staff in the division tracking crypto transactions. It is actively mining transactional data, collaborating with the Reserve Bank, and scrutinising offshore flows to identify non-disclosure and non-compliance.

This means that the grey areas in crypto transactions and offshore investing are disappearing fast as SARS moves aggressively to close reporting gaps and ensure every gain, whether in rands, crypto or other currencies, is properly declared and taxed.

Moves to make now

This regulatory grey zone offers both opportunities and risks. Here’s what executives, investors, and CFOs should prioritise now and going forward:

1. Stay tax compliant

• Understand that SARS has visibility into global data-sharing networks and exchange reporting.
• Disclose all crypto holdings, trades, and offshore assets in annual returns.

2. Plan for legislative change

• Expect amendments to the Exchange Control Regulations to be implemented in the coming months.
• Build flexibility into treasury strategies and offshore structuring to anticipate reforms.

3. Manage cross-border exposure

• Work closely with authorised dealers and tax professionals to avoid breaching evolving rules.
• Keep documentary trails of all crypto-related transactions and offshore transfers.

4. Watch the regulatory space

• Monitor developments from SARS, SARB, and the Intergovernmental FinTech Working Group (IFWG).
• Expect greater alignment between exchange control and tax frameworks.

The bottom line

For now, the Pretoria High Court ruling creates a narrow window of flexibility to move crypto offshore. But this is not a free pass as SARS is intensifying its oversight, and legislative amendments are on the horizon. It is essential that business leaders adopt a proactive approach, so that they are transparent, compliant, and prepared for a future where crypto, tax, and exchange control become more integrated. Failing to act now risks significant financial and reputational consequences.

ENDS