Government Cracks Down on Crypto – Is It Going Too Far?
A month ago National Treasury published draft regulations to replace the outdated Exchange Control Regulations of 1961, which, among other things, aim to incorporate cryptocurrencies, or crypto assets, into the country’s exchange control framework. The implications for holders of Bitcoin and other crypto assets, if the regulations are passed in their current form, are significant: in essence, crypto assets will be treated as foreign assets, subject to the rules governing cross-border transactions.
On 17 April, Treasury published the Draft Capital Flow Management Regulations of 2026 for public comment in the Government Gazette. The new regulations are designed to close a gap in the existing framework that has allowed the relatively easy transfer of crypto assets in and out of the country.
Treasury says that in reviewing South Africa’s exchange control framework, it needed to balance the country’s integration into the global economy with its susceptibility to volatile capital flows and exchange rate swings. In a press release published along with the draft regulations, Treasury said: “The amendments signal South Africa’s readiness to modernise and adopt a ‘positive bias’ approach to managing cross-border capital flows through fewer transaction pre-approvals, a focus on reporting, the surveillance of high-impact and high-risk cross-border transactions, and the combating of illicit financial flows. This shift will align South Africa with international best practice, while also managing various risks.”
Among other things, the draft regulations classify crypto as a foreign asset, meaning that crypto would be included in your offshore allowances. Crypto transactions would need to be effected through authorised crypto asset service providers (Casps) and transactions above a certain threshold value would require specific reporting and government approval.
In a report for Werksmans Attorneys, director Kyle Fyfe unpacks the amendments further. He says the main differences between the old exchange control regulations and the new ones, where they apply to crypto assets, are:
• The inclusion of crypto assets as capital, and an expansion of the definition of capital generally to include anything of monetary value except immovable property;
• The imposition of regulatory obligations on authorised Casps; and
• A prohibition on all dealings in crypto assets between residents and non-residents and a prohibition on dealing in crypto assets generally beyond an unspecified monetary threshold, except where the counterparty is an authorised Casp.
Fyfe says the draft regulations do, however, allow for exemptions, although these have yet to be determined.
He says it is disappointing that the draft regulations do not provide any insight into the treatment of investors who already hold crypto assets acquired in rands locally or abroad. “These individuals could be subject to significant restrictions on how they buy and sell crypto assets going forward,” Fyfe says.
Christo de Wit, country manager for the crypto platform Luno, was scathing of the new regulations, saying they will put an unfair burden on local crypto investors. In a Financial Times opinion piece, he wrote: “Crypto held on a licensed local platform is, in practical terms, an onshore asset. It sits within South Africa’s regulatory perimeter. Classifying it as otherwise creates a distortion that serves no clear policy purpose. Effective regulation … targets behavior that creates genuine harm, whether capital flight, money laundering or sanctions evasion, without burdening the majority of investors, whose activity poses no such risk.”
However, one must remember that this is still a draft document, and that exemptions and transaction thresholds still to be set could remove the compliance burden for smaller investors.
Written comments on the draft regulations must be sent to National Treasury at Commentdraftlegislation@treasury.gov.za by the close of business on Wednesday, 10 June 2026. Following the deadline, National Treasury and the SARB will consider the written comments and make appropriate revisions where necessary.
For any queries, email Media@treasury.gov.za or Media@resbank.co.za.
