Cryptocurrency is not Money or Foreign Currency in South Africa; Rules Judge Mandlenkosi Motha
Gauteng high court Judge Mandlenkosi Motha ruled out that cryptocurrency was not money or foreign currency.
The judge argued instead that classifying it as such was a “strained and impractical” reading. He further ruled that crypto was not capital under Regulation 10(1)(c). He emphasized to the country’s crypto enthusiasts that the industry operated in a regulatory vacuum.
Montha was delivering a verdict between two banks in South Africa. The South African Reserve Bank attempted to forfeit R16.4-million from a Standard Bank money market account linked to Leo Cash and Carry (LCC). A liquidated entity that had funneled funds to foreign cryptocurrency exchanges like Huobi (now known as HTX). Motha ruled that cryptocurrency was not money or foreign currency.
The notice said that crypto assets “are neither money as defined in the NPS Act, nor funds and are therefore not legal tender”. Why? Because the South African Reserve Bank interprets payments strictly as transactions involving money or monetary value, thus crypto currently falls completely outside the National Payment System (NPS) Act. This conveniently aligns with Motha’s conclusion.
The Contradiction in South Africa
Judge Stuart Wilson, had a wildly different finding in a judgment just over a year later, where the applicant (Square Mangundhla) used Luno accounts to purchase and transfer nearly R182-million worth of bitcoin to foreign cryptocurrency exchanges. The South African Reserve Bank seized about R6-million in assets.
Wilson explicitly rejected Motha’s decision, declaring it “clearly wrong”. Wilson ruled that bitcoin is capital, defining capital broadly as any financial asset capable of holding value or acting as a medium of exchange.
He continued this line by saying that transferring bitcoin to foreign wallets constitutes an illegal export of capital. Concluding that bitcoin has all the characteristics of money (as a store of value and negotiable instrument), thereby making it subject to forfeiture. He criticized the previous judgment for a “degree of magical thinking” that overplayed crypto’s intangible nature while ignoring the economic reality of capital flight.
But it gets wilder. While not money, the FSCA declared crypto assets to be a financial product under the FAIS Act in 2022. This means crypto intermediaries (you know them as Crypto Asset Service Providers, or Casps) must be licensed to protect consumers. But this declaration was specifically, and quite confusingly, “not intended to legitimise crypto assets as currency”.
The South African Reserve Bank is currently trying to reverse the NPS Act. This will allow them to explicitly declare and regulate non-money payment instruments in the future.
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This is where National Treasury’s draft regulations enter the chat. They represent the most direct response to the legal vulnerabilities exposed in the Motha ruling.
Treasury is completely replacing the 1961 Exchange Control Regulations with the new Capital Flow Management Regulations of 2026. The media statement even explicitly said that these new amendments “address gaps in the current regulations, including in relation to cross-border crypto asset transactions”.
The tension between the judgments shows the limits of applying analogue-era laws to cryptocurrency. There is a clear rift in digital assets in Africa and more specifically in South Africa. At the end of the day what South Africans are aiming for is to pay for their everyday bills.
