Written by Zoltan Vardai, Staff Writer. Reviewed by Bryan O'Shea, Staff Editor. South Africa draft bill would tighten crypto capital controls
South Africa’s draft capital flow rules would bring crypto under exchange controls, with declaration duties, transaction limits and tougher penalties.
South Africa’s National Treasury has published draft rules that would bring cryptocurrency transactions under the country’s capital flow regime, requiring some holders to declare digital asset holdings and routing certain transactions through authorized providers or Treasury-approved channels.
Published on April 17, the draft Capital Flow Management Regulations bill proposes that crypto holders above a yet-unspecified threshold would be required to declare investments to the treasury within 30 days. In some cases, crypto acquired through an authorized provider for a stated purpose would have to be offered for sale if it was no longer needed for that purpose.
The draft is open for public comment until May 18 and would replace South Africa’s Exchange Control Regulations of 1961, marking the most significant overhaul of the country’s exchange control framework in decades.
The proposal would also limit certain crypto transactions above the threshold to authorized crypto asset service providers or require prior permission from the National Treasury or an authorized person. It would also criminalize cross-border Bitcoin transactions executed without permission and force travelers to declare their crypto holdings during border crossing.
Those caught breaching these rules may face fines of up to 1,000,000 South African rand (around $60,000) and prison terms of up to five years.
Draft Capital Flow Management Regulations of 2026. Source: Treasury.gov.za
Cryptocurrencies are currently regulated by the Financial Advisory and Intermediary Services Act, after the Financial Sector Conduct Authority (FSCA) of South Africa declared crypto to be a financial product in 2022.
Crypto investors may be forced to declare holdings at the border
Under the new draft, every person leaving South Africa would be requested to declare crypto asset possessions intended to be removed from the country or held by the person.
Draft Capital Flow Management Regulations of 2026. Source: Treasury.gov.za
An “enforcement officer” would search any article in a person’s possession or under their control, “for the purpose of ascertaining whether the person possesses or has control of any currency, crypto assets,” meaning that they could theoretically force holders to share their seed phrases and show their digital asset balance.
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The draft bill's short window for public feedback is “not enough time for changes of this magnitude,” according to Carel van Wyk, the founder of Bitcoin payment company MoneyBadger. He wrote in a Wednesday LinkedIn post:
“It introduces compulsory purchase powers over declared crypto, and restricts person-to-person transactions above a threshold.”
The draft would also “limit cross-border crypto transactions to a new category of specially authorised service providers,” he added.
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