The case centred around the behaviour of Mr Square Mangundhla, who, between January 2018 and March 2020, funnelled just under 1,680 Bitcoin purchased in South Africa, worth about R182 million, to Bitcoin wallets that were only accessible through cryptocurrency exchanges registered outside South Africa.
During this period, he used cryptocurrency trading accounts on the popular Luno platform — including an account belonging to a second applicant, Fungai Dangaiso, which he used to get around trading limits.
The South African Reserve Bank (SARB) viewed this conduct as exportation of the bitcoin and their rand value, contrary to the Exchange Control Regulations. The Deputy Governor, also a respondent in the case, declared forfeited to the state about R6 million in Bitcoin assets and money standing to the applicants’ credit in their respective bank accounts and cryptocurrency trading accounts on the basis that this money and cryptocurrency was either the proceeds of Mr. Mangundhla’s contravention of the Regulations, or was itself in the process of being unlawfully exported.
Mangundhla and Dangaiso challenged the forfeiture order. The court dismissed their application.
“Magical Thinking”: What the Judge Said
Wilson J, the judge who presided over the case, did not mince his words. He described the argument that cryptocurrency falls outside South Africa’s financial laws as a form of “magical thinking” — one 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 judge highlighted that the Exchange Control Regulations, issued under the Currency and Exchanges Act of 1933, exist for a very specific reason: to prevent South Africa’s financial resources from being drained out of the country without oversight. They require anyone wishing to move capital abroad to obtain permission from the National Treasury. The rules have been in place for decades and apply to everything from foreign investments to offshore bank accounts.
The court found that Bitcoin fits squarely within the definition of “capital” — meaning any financial asset capable of holding value or being used as a medium of exchange. Bitcoin can be bought with rands, held as an investment, sold for a profit, and in some places used to pay for goods and services. That, the court said, is capital, regardless of whether it lives on a blockchain rather than in a bank account.
Why This Ruling Matters — Even If You’ve Never Bought Bitcoin
While the case concerns cryptocurrency, its significance extends beyond Bitcoin users and traders. The judgment provides clarity on the treatment of digital assets under South African exchange control legislation and illustrates how existing legal principles may be applied to new financial technologies.
It is interesting that the judgment comes a few months after the Minister of Finance announced in the 2026 Budget Speech that draft regulations are being prepared to formally bring cryptocurrency into South Africa’s capital flow management regime. The Mangundhla ruling accelerates that momentum considerably.
On 17 April 2026, National Treasury published the Draft Capital Flow Management Regulations, 2026 for public comment. These draft regulations mark a significant regulatory tightening on the use and movement for crypto assets in South Africa, focused on managing capital flows through a risk-based approach. Comment must be submitted by 30 June 2026.
A Legal Moot Point
Just months ago, a different Johannesburg High Court judge reached the opposite conclusion in a case involving Standard Bank, finding that cryptocurrency was not capital under the Regulations and that the SARB had overstepped its authority. That ruling had been welcomed by the crypto industry as a green light for unregulated cross-border transfers.
Wilson J has now explicitly declared that earlier decision to be “clearly wrong.”
Two High Court judges. Two opposite rulings. The matter is almost certain to be resolved by the Supreme Court of Appeal — but until then, the legal uncertainty is real, and the stakes are high.
What This Means for Everyday South Africans
If you hold, trade, or transfer cryptocurrency, this judgment has direct practical implications:
Moving crypto offshore is not a free pass. Transferring Bitcoin or any other digital asset to a foreign
exchange or wallet without SARB approval could expose you to the same penalties that apply to illegal capital flight — including the forfeiture of your assets.
Your crypto can be seized. The court confirmed that the SARB has the power to declare cryptocurrency forfeited to the State where it is used to circumvent exchange controls. This is not a theoretical risk — it happened in this very case.
Banks and crypto platforms are watching. Financial institutions and licensed Crypto Asset Service Providers (CASPs) will not doubt take notice that cross-border crypto flows carry the same regulatory weight as traditional foreign currency transactions.
From a compliance perspective, the ruling underscores the importance of treating cryptocurrency transactions involving cross-border elements as potentially reportable exchange control transactions, particularly where value is transferred between South African residents and offshore platforms.
The Bigger Picture
The judgment arrives at a time when South African regulators are actively considering further reforms relating to digital assets and cross-border capital flows.
This ruling is a clear signal that the courts — and the Reserve Bank — are no longer willing to let crypto assets slip through the cracks and that the blockchain does not put you beyond the reach of South African law.
Whether you are a seasoned crypto trader, a fintech entrepreneur, or simply someone who bought a little Bitcoin during the pandemic, it is worth taking stock of your cross-border digital asset exposure and dealings — and getting proper advice before the regulatory window closes further.
Case Reference: Mangundhla and Another v South African Reserve Bank and Others (2022-029979) [2026] ZAGPJHC 579, Wilson J, 1 June 2026.
