Crypto assets and exchange control: A critical analysis of a defining high court judgment

On 1 June 2026, the Gauteng High Court (Wilson J) held in Mangundhla and Another v South African Reserve Bank and Others (No. 2022-029979) that Bitcoin “constitutes both money and capital” under the “Exchange Control Regulations of 1961, (Regulations)” and that transferring crypto assets to foreign exchange wallets amounts to the unlawful export of capital. The court dismissed the review application against forfeiture orders totalling about R6-million, with costs on scale C. The contrary decision in Standard Bank v SARB 2025 (5) SA 289 (GP) was dismissed as “clearly wrong”.

The court defined “capital” as any financial asset capable of holding value or serving as a medium of exchange (para. 13). Applying this test, Bitcoin qualified because it can be exchanged for fiat currency, used directly to purchase goods and services, and serves as both a medium of exchange and a store of value. The court held that export occurs when the thing exported leaves the country and that crediting Bitcoin to wallets on foreign exchanges suffices (para 26). Regarding forfeiture, the court held that Bitcoin is money because the regulations defined “money” to include any bill of exchange or other negotiable instruments, and Bitcoin exhibits qualities sufficient to bring it within this definition.

The court’s definition of “capital” finds no support in the regulations, the Currency and Exchanges Act 9 of 1933, or any binding authority. It offers no limiting principle: on this formulation, any asset holding value and exchangeable, including art, vehicles, or any tradable commodity, would constitute capital. The court does not explain why Oilwell (Pty) Ltd v Protec International Ltd 2011 (4) SA 394 (SCA) (at paras 9-11) excluded tangible property if the test is merely the capacity to hold value and serve as a medium of exchange. The distinction between financial and tangible assets collapses entirely. Moreover, the phrase “medium of exchange” is indeterminate; many assets function as media of exchange in specific contexts without being capital for regulatory purposes.

Motha J in Standard Bank held that cryptocurrency is neither money nor capital, emphasising it is not legal tender, is nothing more than codes on a digital ledger, exists globally, and that restrictive interpretation applies to punitive forfeiture powers. Wilson J dismissed this as “clearly wrong” (para 22) without a sustained engagement with Motha J’s reasoning. A conflicting high court judgment on identical legal questions merits careful distinction or reasoned explanation of error. The conclusory dismissal is insufficient. Regarding restrictive interpretation, “the court states that where the only reasonable interpretation… attaches harsh consequences, the statute must be applied as it is found” (para 25). This raises the question if the interpretation that Bitcoin is capital is the only reasonable interpretation? Motha J thought not, and the court does not explain why his alternative reading is unreasonable.

Additionally, Bitcoin has no physical existence; it exists as entries on a distributed ledger replicated globally. The notion of a ledger entry leaving a country is theoretical and the court does not explain what physical or jurisdictional boundary is crossed. The location of a cryptocurrency wallet is indeterminate, where an exchange may be registered in a particular jurisdiction, the blockchain itself is decentralised. The court’s assertion that the starting point is the location of the account, not the account holder (para 28) assumes a crypto account has a location, which does not hold for self-custodied wallets or decentralised exchanges. The ATM analogy (drawing cash from a South African account at a London ATM) is inapt because physical banknotes cross a border; a Bitcoin transfer involves no physical movement. The approach creates absurd results: if transferring to a foreign-registered exchange is export, then any use of a foreign exchange from a South African computer constitutes export. The court provides no guidance regarding exchanges with dual registration or decentralised exchanges.

The Bills of Exchange Act 34 of 1964 sets out requirements for a negotiable instrument: writing, unconditional order or promise, fixed sum of money, named payee or bearer, and signature. Bitcoin satisfies none of these. It is not a written document, contains no promise or order, and is not signed. The court does not engage with these statutory requirements; instead substituting a functional test (anything exchangeable for value) for the legal requirements of negotiability.

Last, the court dismissed the PAJA complaint, noting applicants had three years to engage with the investigation and five weeks to respond to the proposed forfeiture. However, the legal theory underlying forfeiture may not have been clear until the final report. More troubling, the court admits “hesitation” regarding forfeiture against Ms Dangaiso, finding it potentially “disproportionate”, but upholds it because “no such case was made out” (para 35). A court that suspects disproportionality cannot waive it away because the applicant did not plead that proportionality is inherent in PAJA review.

The judgment’s policy orientation is defensible, but its doctrinal foundations are not. A court may properly interpret ambiguous text in light of legislative purpose. What it may not do is supply coverage where none exists, rewrite statutory definitions, or ignore the legislature’s deliberate silence. Mangundhla does all three. The direct conflict between Mangundhla and Standard Bank at the same court level makes Supreme Court of Appeal intervention inevitable. The SCA may well uphold the outcome on narrower grounds. The current reasoning is unlikely to survive intact. South Africa now has conflicting high court authorities on whether exchange controls apply to crypto assets, a situation requiring appellate resolution. Pending appellate clarity, practitioners should advise that any transfer of cryptocurrency by a South African resident to a foreign-registered exchange without South African Reserve Bank approval carries a meaningful risk of being treated as an unlawful capital export. The deeper question this case poses, whether courts or Parliament should adapt a 20th-century regulatory framework to 21st-century digital assets, remains open. DM