South African arrested over R11,500 Bitcoin transfer

Ziyadh Hoorzook, a 35-year-old South African man, appeared in the Lichtenburg Magistrates Court this week after being arrested on allegations of terror financing.

According to the Directorate for Priority Crime Investigation, better known as the Hawks, Hoorzook transferred bitcoins worth R11,500 to an organisation that allegedly has terrorist ties in 2017.

The Crimes Against the State team of the Hawks Serious Organised Crime Investigation arrested him on 3 January 2025 following a years-long investigation.

He has been charged with contravening the Protection of Constitutional Democracy Against Terrorist and Related Activities Act (POCDATARA).

The Hawks said in a statement that the investigation was meticulous, beginning in May 2018 when it and the Financial Intelligence Centre (FIC) received information about suspicious transactions allegedly linked to terror financing.

Bitcoins worth R11,500 were allegedly bought through Luno, a South African cryptocurrency exchange and wallet provider, after Hoorzook transferred funds from his bank account.

The transaction happened on 30 November 2017.

According to the investigators, that same day the bitcoins were transferred from the suspect’s Luno wallet to the wallet associated with an organisation that describes itself as an independent charity.

“A preliminary investigation revealed that the transfer was in response to an advisement appealing for financial support of the activities with weapons, financial aid and other projects assisting the participants in another country,” the Hawks stated.

“Furthermore, it is alleged that this non-profit organisation is linked to other two organisations.”

Police obtained a search warrant and, on 3 October 2024, searched the suspect’s residence in Sandton. Several pieces of evidence have been seized for further investigation.

The Hawks also reported that they found two of the suspect’s licensed firearms were not locked away in a safe as prescribed by law during the search. Following the search, a relevant case docket was opened.

At his bail hearing on Friday, 10 January 2025, Hoorzook said that he intends to plead not guilty and that the case against him has been exaggerated.

“The state has misaligned me to a narrative which is factually untrue.”

In a statement about the arrest, Hawks boss Godfrey Lebeya reaffirmed the law enforcement agency’s commitment to combating money laundering and terror financing in alignment with Financial Action Task Force (FATF) standards.

“Our dedicated team, in collaboration with local and international partners, are working as a collective to halt the illicit flow of funds that fuel organised crime and terrorism.”

The FATF greylisted South Africa on 24 February 2023 for falling short on its eleven measures of a country’s effectiveness in combating money laundering and the financing of terrorism.

It highlighted 22 specific shortcomings, which South Africa has taken steps to address and exit the grey list.

Last year, the Financial Intelligence Centre issued Directive 9, which will require crypto platforms in South Africa to identify the parties to a cryptocurrency transaction.

This is an implementation of the FATF’s “travel rule”, which requires financial institutions, including those who deal in virtual assets, to provide relevant originator and beneficiary information alongside transactions.

According to the FATF, this helps to prevent criminal and terrorist misuse.

Most recently, National Treasury has called for public comment on proposed amendments to laws with the aim of strengthening the country’s Anti-Money Laundering and Counter-Terrorism Financing legislation.

BusinessTech reported that South Africa has now largely or fully addressed 16 of the 22 items the FATF highlighted in 2023.

This leaves six items to still be completed by the next report, which is due in the coming months.

In hopes of addressing outstanding deficiencies by its next reevaluation, National Treasury recently published the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill.

It proposes amendments to four pieces of legislation, namely:

• The Financial Intelligence Centre Act, 2001
• Financial Sector Regulation Act, 2017
• Companies Act, 2008
• Nonprofit Organisations Act, 1997

Among the changes being proposed are raising penalties and expanding regulatory oversight to better align with international standards.