Newsflash! Standard Bank wins partial victory over SARB in Crypto Forfeiture Battle

The High Court in Pretoria handed down judgment in Standard Bank v South African Reserve Bank and Others on 15 May 2025. The case deals with whether SARB can rely on outdated exchange control laws to seize funds linked to cryptocurrency transactions. While the decision is not binding outside Gauteng, it is important for banks, creditors, crypto platforms and liquidators.

Leo Cash and Carry, a Rustenburg-based wholesaler, secured a R40 million overdraft from Standard Bank in 2020. It pledged R15 million in a Money Market Account as security. It then used R10 million of the funds to settle its Nedbank overdraft. A year later, SARB’s Financial Surveillance Department froze both accounts, suspecting Leo Cash and Carry had breached exchange control laws by transferring Bitcoin overseas. SARB then declared both amounts forfeited to the State under Regulation 22B.

Standard Bank challenged this. It argued the R16.4 million in the pledged account belonged to it as security for the overdraft, and that it had no knowledge of any regulatory breaches. It also argued that crypto is not “money” or “capital” under the current law, and that SARB’s actions were unlawful.

The court dismissed Standard Bank’s claim to the Nedbank money, finding it had no standing to claim funds in an account it did not hold. But on the Money Market Account, the court agreed with the bank. Judge Motha found that SARB had overreached. Cryptocurrency is not legal tender in South Africa, nor is it captured under the definitions of “money” or “capital” in the 1961 Exchange Control Regulations. The court said the regulations cannot be stretched to cover crypto, especially when they carry serious consequences like forfeiture. If SARB wants to regulate crypto, Parliament must amend the law.

This ruling means that, for now, SARB cannot simply grab crypto-related funds using existing exchange control laws. For banks, it confirms that properly documented pledge and cession agreements still carry legal weight, even when a client is under investigation. For crypto platforms and estate liquidators, it shows that suspicion is not enough to justify forfeiture, and that the legal status of crypto in South Africa remains unresolved.

The case doesn’t bind other courts outside Gauteng, but it does highlight the legal uncertainty and growing pressure to modernise financial regulation. If crypto is to be regulated under the exchange control system, it must be done properly, through clear and specific legislation.

For advice on cryptocurrency compliance, asset forfeiture, and security rights in South Africa, contact Spence Attorneys at info@spencelaw.co.za or visit www.spencelaw.co.za.

Disclaimer: This article is for general information purposes only and does not constitute legal advice. Please consult a qualified attorney for guidance on your specific circumstances.