THIS judgment by Wilson J is significant for several reasons.
First, it applies a purposive approach to the interpretation of the Excon Regulations and concludes that Bitcoin is both “capital” and “money” for the purposes of the exchange control regime.
Second, Wilson J concludes that the Standard Bank of South Africa v South African Reserve Bank 2025 (Standard Bank Judgment) is wrong, creating a conflict in authority in the Gauteng Division of the High Court on the question of whether cryptocurrency falls within the ambit of the Excon Regulations.
Third, the judgment confirms that the transfer of Bitcoin to cryptocurrency wallets on exchanges registered outside South Africa amounts to the “export” of capital, even if the wallets can be accessed from anywhere in the world.
The review application was dismissed and the forfeiture orders were upheld. Wilson J did, however, express some hesitation in endorsing the forfeiture order made against the money in Ms Dangaiso’s bank account, noting that given her apparently limited involvement in Mr Magadha’s activities, an order for forfeiture against her might be disproportionate.
However, no such case had been made out by the applicants.
In reaching his conclusion that Bitcoin is “capital”, Wilson J began with the text of Regulation 10(1)(c) of the Excon Regulations, which provides that no person shall, except with permission granted by the Treasury, enter into any transaction whereby capital or any right to capital is directly or indirectly exported from South Africa.
