Judge vs Judge: “Clearly wrong” court ruling about Bitcoin in South Africa
The High Court in Johannesburg has ruled that Bitcoin is both money and capital under South Africa’s exchange control rules, contradicting a prior ruling in the Pretoria High Court in May 2025.
The judgment, handed down by Judge Stuart Wilson on 1 June 2026, dismissed an application by Square Mangundhla and an associate to review and set aside Reserve Bank forfeiture orders.
The case centred on whether Bitcoin transfers from South African accounts to wallets on cryptocurrency exchanges only available outside South Africa amounted to an unlawful export of capital.
Wilson explained that counsel for Mangundhla reminded him that he could not depart from Judge Mandlenkosi Motha’s previous ruling unless he concluded it was “clearly wrong”.
“I respectfully so conclude,” he said, explaining that Motha had fixated on the technology behind cryptocurrency, rather than the purposes it was used for.
The Reserve Bank said Mangundhla used Luno accounts to buy just under 1,680 Bitcoin in South Africa between January 2018 and March 2020.
It alleged that Mangundhla used his own Luno account, as well as that of an associate, to circumvent the platform’s trade limits.
The Bitcoin was worth just under R182 million and was transferred to wallets accessible through cryptocurrency exchanges registered outside South Africa, according to the judgment.
The Deputy Governor of the Reserve Bank declared just under R6 million in Bitcoin assets and bank balances forfeit to the state.
Mangundhla argued that cryptocurrency was not money, capital, currency, or a security under the Exchange Control Regulations, and that foreign wallet transfers were not payments.
Wilson rejected these arguments, finding that Bitcoin was a financial asset capable of holding value and being used as a medium of exchange.
The court said treating Bitcoin as outside exchange control would undermine capital controls by allowing money to leave South Africa through cryptocurrency transfers.
Bitcoin as capital
Wilson said Bitcoin’s digital and intangible characteristics did not matter where it allowed capital to move beyond South African borders.
The judgment said Exchange Control Regulation 10(1)(c) prohibited transactions that directly or indirectly export capital from South Africa without Treasury permission.
Mangundhla had admitted to performing the transactions and that he did not have Treasury permission, leaving the court to decide whether Bitcoin was capital.
Wilson said capital under the regulations was not limited to fiat currency, but included financial assets that can hold value or function as exchange media.
He said Bitcoin met that test because it can be exchanged for fiat currency and carries value through the blockchain system.
“It follows from the undisputed facts that the capital at issue in this case was ‘exported’ within the meaning of Regulation 10 (1),” Wilson ruled.
“Export takes place when the thing exported leaves the country. The mere fact that the Bitcoin was credited to cryptocurrency wallets on foreign exchanges is enough to conclude that capital was exported.”
Counsel for Mangundhla argued that export could not have taken place unless the holders of those wallets could be identified as resident in a foreign jurisdiction.
Alternatively, if it could be established that the Bitcoin was converted to foreign currency in a foreign jurisdiction, it could be considered exported.
“I do not agree. Plainly, once the Bitcoin was placed beyond the Reserve Bank’s jurisdiction, it was exported,” Wilson stated.
Forfeiture upheld
Mangundhla also argued that Bitcoin in his and his associate’s Luno wallets could not be forfeited because the regulations only allowed forfeiture of goods or money.
“The force of this contention depends in large part in my accepting that Bitcoin is something other than I have found it to be,” Wilson ruled.
Wilson said that “money” under the Regulations was defined to include “any bill of exchange or other negotiable instrument”.
“The qualities I have attributed to Bitcoin are plainly sufficient to bring it within the definition of a ‘negotiable instrument,’” he said.
“That is, it is no more than a right to be credited a specified sum of Bitcoin, which is itself exchangeable for fiat currency and other things of value.”
Wilson said even if he were wrong, Bitcoin’s general characteristics bring it well within any sensible conception of money.
“It can be converted into fiat currency. It can also be used directly to purchase goods and services from merchants who accept it,” he said.
“It is both a medium of exchange and a store of value. In my view, Bitcoin is clearly money. The Bitcoin was correctly subject to forfeiture.”
It is worth noting that Wilson’s ruling directly contradicts the Reserve Bank’s own belief and public statements that Bitcoin was neither an effective medium of exchange nor a store of value.
“Unbacked crypto assets, like Bitcoin, are not well-suited to perform the function of money and they are not recognised as legal tender in the SARB Act.”
That statement was contained in a joint communication published on Thursday, 28 May 2026, which dealt with crypto assets used to pay for goods and services in South Africa.
The joint statement was issued by the National Payment System Department at the South African Reserve Bank and the Financial Sector Conduct Authority (FSCA).
“Unbacked crypto assets lack supporting assets, resulting in highly volatile prices. As a result, they are generally not well-suited to perform the main functions of money,” they said.
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