A note on Mangundhla and Another v South African Reserve Bank, Gauteng Division (Johannesburg), 1 June 2026
In a judgment delivered on 1 June 2026, the Gauteng Division of the High Court (Wilson J) held that cryptocurrency, at least in the form of Bitcoin, is both “money” and “capital” for the purposes of the Exchange Control Regulations, 1961 and the Currency and Exchanges Act 9 of 1933. In doing so, the Court expressly declined to follow an earlier decision of the same Division, Standard Bank of South Africa v South African Reserve Bank, holding it to be “clearly wrong”. The practical consequence is significant: capital cannot lawfully be moved offshore through cryptocurrency without Treasury approval, and crypto assets are themselves liable to forfeiture for exchange-control breaches.
Background
The first applicant, Mr Mangundhla, held an account on the Luno cryptocurrency trading platform, as did the second applicant, Ms Dangaiso. Between January 2018 and March 2020, Mr Mangundhla used both accounts, Ms Dangaiso’s solely to circumvent the trading limits applicable to his own, to channel just under 1 680 Bitcoin, purchased in South Africa for around R182 million, into Bitcoin wallets accessible only through cryptocurrency exchanges registered outside South Africa.
The South African Reserve Bank treated this as the unlawful export of capital contrary to Regulation 10(1)(c). Exercising delegated powers under Regulation 22B, the Deputy Governor declared forfeit to the State just under R6 million in Bitcoin and money standing to the applicants’ credit in their Standard Bank and Luno accounts, on the footing that those amounts were either the proceeds of the contravention or were themselves in the process of being unlawfully exported.
The applicants did not dispute that the transactions had taken place, that Mr Mangundhla was behind them, or that Treasury permission had not been obtained. The contest was purely legal: did the Regulations apply to cryptocurrency at all?
The Applicants’ Case
The challenge to the forfeiture orders rested on four arguments. First, that cryptocurrency is neither capital, currency nor a security under the Regulations, and that transferring it to a foreign-hosted wallet is not a “payment”. Second, that even if Bitcoin is capital, there was no “export” in the sense required by Regulation 10(1)(c). Third, that the Reserve Bank’s investigation was procedurally unfair under the Promotion of Administrative Justice Act (PAJA). Fourth, that even if the orders were otherwise valid, Bitcoin is neither “money” nor “goods” and so could not be forfeited under Regulations 22A and 22B.
The Court’s Reasoning
1. “Capital” in its financial sense
Approaching the question as one of ordinary statutory interpretation, text, context and purpose, the Court accepted, on the authority of Oilwell (Pty) Ltd v Protec International Ltd, that the Regulations use “capital” in its financial sense rather than to capture every tangible asset. But the Court rejected the narrower suggestion that capital is synonymous with fiat currency: if it were, “capital” and “currency” (which the Regulations use distinctly) would collapse into one another. Capital, Wilson J held, means any financial asset capable of holding value or being used as a medium of exchange, a category broad enough to include negotiable instruments and other value-bearing tokens.
2. Bitcoin satisfies that definition
Examining how Bitcoin actually works, the blockchain ledger, the mining process, the mathematically capped supply that keeps it scarce enough to hold value, the Court concluded that Bitcoin is plainly a financial asset that holds value and functions as a medium of exchange. It can be bought with rand, held in anticipation of price gains, sold at a profit, and in some places used directly to pay merchants. Its intangible and technological features did not place it beyond the reach of the concept of capital.
3. Purpose, not exotic properties, is decisive
The Court emphasised that the question turns less on the inherent nature of cryptocurrency than on the uses to which it can be put. Allowing crypto to escape exchange control would render those controls “virtually worthless”, since anyone of means could move capital offshore simply by converting it and transferring it to a foreign exchange, squarely at odds with the regime’s purpose of regulating and, where necessary, curbing capital outflows. Wilson J cautioned courts against ascribing “irreducibly exotic” properties to novel phenomena that nonetheless exhibit precisely the attributes a statute is meant to regulate.
4. Breaking with Standard Bank
The most consequential feature of the judgment is its open disagreement with Standard Bank of South Africa v South African Reserve Bank, in which Motha J had held that cryptocurrency is neither money nor capital, reasoning that it is not legal tender in many countries, is “nothing more than codes on a digital ledger”, and exists “everywhere and nowhere”, and that the punitive nature of the forfeiture power favours a restrictive reading. Wilson J held that decision to be clearly wrong: the emphasis on intangible and technological characteristics overlooks the real-world consequences of crypto’s use. While punitive statutes are generally construed restrictively, that principle does not displace the court’s duty to give a statute its proper meaning; where the only reasonable interpretation attaches harsh consequences to defined conduct, the statute must be applied as found, absent a challenge to its validity.
5. The capital was exported
On the facts, crediting the Bitcoin to wallets on foreign exchanges was enough to constitute export: once the Bitcoin was placed beyond the Reserve Bank’s jurisdiction, it had left the country. The Court rejected the argument that export required identifying the wallet holders as foreign residents or proving conversion into foreign currency abroad. What mattered was the location of the account, not the account holder, illustrated by the analogy of drawing on a South African account at a London ATM, which exports the money regardless of where the account holder happens to be.
6. Procedural fairness and forfeiture of the Bitcoin
The PAJA complaint, that the applicants had too little time to respond, was rejected: they had known of the investigation since at least July 2019, were interviewed in early 2022, and had roughly five weeks to make representations before the orders were made, and they never disputed the factual findings. As for the Bitcoin in the Luno wallets, the Court held that Bitcoin falls within the Regulations’ definition of “money” (which includes a negotiable instrument), and in any event sits within any sensible conception of money as a medium of exchange and store of value. The Bitcoin was therefore correctly subject to forfeiture.
Outcome
The review application was dismissed with costs, including the costs of two counsel on the “C” scale. The Court noted some hesitation about the forfeiture against Ms Dangaiso’s bank account, given her limited involvement and the possibility of disproportionality, but no such case had been pleaded and the order stood.
Practical Takeaways
A direct conflict in the High Court. There are now two opposing Gauteng judgments on whether crypto falls within exchange control, Standard Bank (no) and Mangundhla (yes). Until the Supreme Court of Appeal or Constitutional Court resolves the divergence, the position is uncertain, and the outcome of any given matter may depend on which line a court prefers. Clients with cross-border crypto exposure should plan for the more onerous Mangundhla position.
Treasury approval is the safe course. On the reasoning in Mangundhla, moving Bitcoin (and likely other value-bearing cryptocurrencies) to a foreign-hosted wallet without Treasury permission is an export of capital under Regulation 10(1)(c). Anyone structuring offshore crypto transfers should obtain exchange-control clearance rather than assume the regime does not reach digital assets.
Forfeiture risk is real. Because Bitcoin qualifies as “money”, crypto holdings themselves, not merely associated fiat balances, can be declared forfeit for exchange-control breaches. The use of a third party’s account to evade trading limits also exposed that account holder to forfeiture, a caution against lending accounts to others.
Challenge findings early and consider proportionality. The PAJA challenge failed partly because the applicants never disputed the underlying facts and had ample opportunity to engage. Where a forfeiture may be disproportionate, particularly against a peripheral party, that case must be properly pleaded and supported; the Court will not infer it.
Disclaimer: This article reflects the law as at the date of the judgment discussed and is intended for general information only. It is not a substitute for tailored legal advice on any particular matter.
