CRYPTO
A NEW REGULATORY FRAMEWORK On 17 April 2026, National Treasury published the draft Capital Flow Management Regulations for comment. The proposals explicitly bring crypto assets within the exchangecontrol framework.
Under the draft,“ capital” includes anything with monetary value or that can be converted into money, expressly including crypto assets. Transactions above thresholds still to be determined would have to be conducted through an Authorised Crypto Asset Service Provider. Sending crypto assets outside South Africa or paying an offshore recipient in crypto would require permission.
Enforcement provisions include search and seizure powers and the forfeiture. The compelled disclosure of private keys is among the most striking provisions. A person whose assets are forfeited could be required to provide the passwords, PINs, or codes needed to access them. Failure to comply would be a criminal offence.
This statutory tool acknowledges the difficulty of seizing digital assets and addresses it with uncompromising force. Penalties could include fines of up to R1 million, imprisonment for up to five years, or a fine equal to the value of the assets involved where that amount exceeds R1 million.
If implemented, the result would be a framework of simply extraordinary force.
THE CROSS-BORDER MANUAL The draft Crypto Assets Manual for Cross-Border Activities, released on 3 August 2026, sets out how the proposed system would operate.
It creates three categories of Authorised Crypto Asset Service Providers, covering remittances, broader crossborder transactions through South African custodial wallets, or both.
Individuals could transfer crypto assets offshore within a R2 million annual single discretionary allowance, without a Tax Compliance Status PIN, or a R10 million foreign capital allowance with tax clearance.
Transfers from a domestic authorised provider or noncustodial wallet would be treated as cross-border. Resident companies could conduct trade through domestic custodial wallets, but could not import or export capital through crypto transactions.
WHERE DOES THIS LEAVE CRYPTO OWNERS? For now, the legal position remains unsettled. The Wilson judgment treats Bitcoin as money and capital under existing exchange controls, but conflicts with Standard Bank. The regulations and manual remain drafts and may change following public consultation.
Their direction is, however, unmistakable. Cross-border crypto transactions are moving towards formal oversight through authorised providers, with extensive reporting and enforcement powers.
Questions remain about unspecified transaction thresholds, corporate restrictions, decentralised finance, NFTs, and staking. Compelling disclosure of private keys may also face constitutional scrutiny.
This is not a light-touch framework, but a comprehensive assertion of state authority over an asset class many assumed was beyond sovereign reach. For service providers, it would bring a considerably heavier compliance burden. For investors, it signals that crypto’ s decentralised architecture does not place it beyond the reach of South African exchange controls.
The regulatory vacuum is closing decisively. Those who fail to adapt will learn, painfully, that the law has caught up with the technology. IB
SEPTEMBER 2026 / INBOUND SA 87