When the Supreme Court of Appeal (SCA) hears the Standard Bank vs SARB appeal in 2026, the court will decide whether the 1961 Exchange Control Regulations can stretch to cover Bitcoin.
This moment will define whether a borderless digital asset fits inside legislation written before computers existed. The stakes sit high, especially as the crypto crackdown intensifies across South Africa.
What the High Court decided
The High Court ruled that cryptocurrencies are neither currency nor capital under regulations 3(1)(c) and 10(1)(c). These regulations carry criminal and forfeiture penalties, so the court turned to the Democratic Alliance vs ANC [2015] ZACC 1 precedent.
The Constitutional Court held that uncertainty within a penalty provision must be resolved in favour of liberty.
In simple terms, the state may confiscate property only when the law speaks with clarity. The court found a regulatory gap because the regulations say nothing about crypto assets. Any attempt to stretch definitions would turn judges into lawmakers. That risk grows even sharper under the crypto crackdown.
Why the Oilwell precedent matters
The court leaned on Oilwell (Pty) Ltd vs Protect International Ltd [2011] ZASCA 29, where the SCA held that intellectual property was not capital. The judgment triggered an amendment in 2012, which added intellectual property to regulation 10(4). Notably, that was the last regulatory amendment since.
Oilwell offers a clear lesson. When new forms of value emerge, Parliament must act, not the courts. Even valuable assets cannot slide into old definitions by analogy. In 2011, the SCA insisted on textual precision over policy urgency. The High Court followed the same logic here, especially with the crypto crackdown gaining momentum.
Why does Shuttleworth not rescue SARB?
SARB may look to Shuttleworth vs SARB [2015] ZACC 17, where the Constitutional Court upheld a 10% exit levy. That case confirmed the legitimacy of exchange control as a tool to protect currency. Yet Shuttleworth dealt with conventional money, not digital assets. No criminal penalties were involved, so the restrictive interpretation rule never applied.
In Shuttleworth, the issue was constitutionality. In Standard Bank vs SARB, the issue is definition: can Bitcoin qualify as “capital” under a law from 1961?
The court said no, calling the interpretation strained and impractical. How would someone declare Bitcoin at a border? A purposive reading that breeds absurdity does not survive judicial scrutiny.
Legislative amendments remain unfinished
SARB’s 2014 Position Paper on Virtual Currencies stated plainly that crypto transfers fall outside the Regulations. It also confirmed virtual currencies are not legal tender and fall beyond the Bank’s regulatory oversight.
The 2021 IFWG Position Paper on Crypto Assets repeated this. It is recommended that crypto assets should not hold legal tender status or be classified as electronic money. It further proposed an amendment to include crypto assets inside regulation 10(4). The implementation plan projected completion within 9-12 months, yet the amendment remains delayed.
The 2024 IFWG update shows Recommendation 5 as a stance maintained and Recommendation 12 as ongoing. This means regulators still intend to amend the definition of capital. If cryptocurrency already fell under the existing definition, SARB’s position in litigation, no amendment would be necessary. The contradiction sits at the heart of the crypto crackdown, which now tests regulation against technological reality.
Implications of the SCA appeal
If SARB loses, FinSurv and Treasury must finally amend regulation 10(4) and bring crypto within the regulatory net. This would align the law with the IFWG recommendations and end the uncertainty.
If the bank wins, Bitcoin and other crypto assets will fall under regulation 10(1)(c) as capital. A later amendment would then merely clarify what the law always meant.
Right now, the High Court ruling remains suspended pending appeal, creating uncertainty for banks and investors. Regulation suggests crypto falls outside the definition of capital. Yet institutions monitor foreign allowances used for crypto purchases. The inconsistency shows why the crypto crackdown stands on shaky legal ground.
In conclusion
Oilwell, Democratic Alliance, and Shuttleworth point in one direction. Courts cannot legislate through interpretation. Without Parliamentary amendment, crypto assets do not fall under regulation 10(4). South Africa stands at a pivotal moment.
The crypto crackdown now forces lawmakers to decide whether Bitcoin belongs inside a regulatory regime built in another century.
Joon Chong | Partner | Webber Wentzel | mail me |
