JUDICIAL CONUNDRUMS: Crypto Corner: We’re no closer to figuring out what cyber assets are in SA

The judgment that set the standard for local crypto regulations has just been correctly called into question, but thankfully there is still time for the public to shape the new laws of digital money.

Gauteng high court Judge Mandlenkosi Motha is no stranger to powerful paragraphs in his decisions, and he delivered a few, as the kids would say, bars in the 2025 judgment Mzansi’s crypto community was most anticipating.

“The consequences of the massacre of Black people in Sharpeville reverberated inside the corridors of the Apartheid economy and shook the very foundations of the regime. To stem the tide of the resultant capital flight and a run on the rand, the apartheid regime passed the Exchange Control Regulations in 1961 (Excon), which, save for a few changes, is still in place… the vexed question is whether these 60-plus old Excon Regulations are fit for purpose to deal with the machinations in the world of cryptocurrency.”

In the matter before him, where the South African Reserve Bank attempted to forfeit R16.4-million from a Standard Bank money market account linked to Leo Cash and Carry (LCC), a liquidated entity that had funnelled funds to foreign cryptocurrency exchanges like Huobi (now known as HTX), Motha ruled that cryptocurrency was not money or foreign currency.

He argued instead that classifying it as such was a “strained and impractical” reading, further ruling that crypto was not capital under Regulation 10(1)(c), declaring that, in case the country’s crypto enthusiasts weren’t aware, the industry operated in a regulatory vacuum.

It wasn’t, however, the mic drop that it seemed at the time.

His gavel-swinging colleague, Judge Stuart Wilson, had a wildly different finding in a judgment just over a year later, where the applicant (Square Mangundhla) used Luno accounts to purchase and transfer nearly R182-million worth of bitcoin to foreign cryptocurrency exchanges. The South African Reserve Bank seized about R6-million in assets.

Wilson explicitly rejected Motha’s decision, declaring it “clearly wrong”. Wilson ruled that bitcoin is capital, defining capital broadly as any financial asset capable of holding value or acting as a medium of exchange.

He continued this line by saying that transferring bitcoin to foreign wallets constitutes an illegal export of capital, concluding that bitcoin has all the characteristics of money (as a store of value and negotiable instrument), thereby making it subject to forfeiture. He criticised the previous judgment for a “degree of magical thinking” that overplayed crypto’s intangible nature while igno