The recently delivered judgment in Standard Bank v South African Reserve Bank, which concluded that cryptocurrencies do not constitute “capital” for purposes of Regulation 10(1)(c) of the Exchange Control Regulations, has entered a new phase.
On 23 May 2025, the first and third respondents (the South African Reserve Bank and Ms Nomfundo Tshazibana, in her capacity as a senior official) filed an application for leave to appeal the findings of the High Court. This application not only challenges the conclusion that cryptocurrency falls outside the ambit of “capital” but also takes issue with certain interpretive and procedural aspects of the decision, raising renewed questions about whether the forfeited funds should revert to the South African Reserve Bank or Standard Bank.
The application for leave to appeal is particularly significant in that it seeks to overturn the Court's determination that cryptocurrencies do not constitute “money” or “foreign currency”. The respondents maintain that the undisputed conduct of Leo Cash and Carry (Pty) Ltd ought to have been held to contravene the Exchange Control Regulations. The thrust of their argument is that the High Court should have concluded that cryptocurrency falls within the ambit of “capital” (or at the very least, amounting to a right to capital), thereby triggering Regulation 10(1)(c). In the respondents' view, it was also incumbent on the Court to examine the effect of these transactions - that is, an alleged export of capital - rather than focus exclusively on whether cryptocurrency per se constitutes “capital”.
An important practical consequence of this application is that it suspends enforcement of the High Court's order for the duration of the appeal proceedings, preserving the status quo until the final determination of the matter bya a higher court. This means that the set-aside forfeiture order is, for the time being, in abeyance. It also means that the clarity previously provided by the High Court on whether cryptocurrency is regarded as “capital” will be subject to reconsideration by the Supreme Court of Appeal or, alternatively, a full bench of the Gauteng Division of the High Court.
While the judgment initially offered welcome guidance on the intersection between modern fintech realities and the Exchange Control Regulations, the pendency of the appeal means that the legal position on cryptocurrencies remains potentially unsettled. Unless legislative amendments are made, the ultimate ruling from an appellate court is likely to have far-reaching implications for businesses and individuals engaged in cryptocurrency transactions. It may also renew calls for more explicit regulation or statutory intervention to address the rapidly evolving nature of digital assets.
In light of this development, parties should be cognisant that the High Court's order stands suspended. Careful attention should be paid to any further legislative or judicial developments, as the final position on the exchange control treatment of cryptocurrency is yet to be definitively settled. If the judgment is overturned on appeal, all stakeholders, including financial institutions and businesses that hold or transact in digital currency, can expect renewed scrutiny from regulators as well as a re-evaluation of existing compliance strategies.
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