Authored By: Tsiane Lekekela
Eduvos
Case Name: Standard Bank of South Africa v South African Reserve Bank and Others (047643/2023) [2025] ZAGPPHC 481
Court Name: Gauteng High Court of South Africa (Pretoria).
Bench type: Constitutional Bench.
Judges: Motha, J.
Appearances for the applicant: G Engelbrecht SC and KD lles from Van Hulsteyns Attorneys.
Appearances for the 1st – 3rd respondents: KW Luderitz SC and KS Moloisane from GMI Attorneys Inc.
Date of judgement: 15 May 2025
Parties
The applicant of the case is “The Standard Bank of South Africa”, which is the largest bank in Africa established in 1862. It is a subsidiary of “Standard Bank Group” and a leading financial service provider.[1] Standard Bank Group is the largest group in Africa by assets.[2] They offer financial banking services in retail, commerce, corporate as well as investments.2 Their objectives are focused on digital innovation and sustainable growth to foster economic development in Africa.2 The first respondent of the case is “The South African Reserve Bank”, the central bank of South Africa established in 1921, regulated by Section 223 of the Constitution of South Africa, 1996.[3] The South African Reserve Bank Act 90 of 1989 mandates the central bank to protect the currency of the rand.[4] The second respondent of the case is the Minister of Finance of the Republic of South Africa, “Enoch Godongwana”. [5] The third respondent is “Nomfundo Tshazibana”, who is the Deputy Governor of the Prudential Cluster of the South African Reserve Bank.5 The fourth respondent is “Jacques Andre Fisher”, a joint liquidator of Leo Cash and Carry (Pty) Ltd.5 Leo Cash and Carry (Pty) Ltd was a South African wholesale trading business operating in Rustenburg in the Northwest province. The company was established in 2018 and liquidated in December 2021.[6] The fifth respondent is “Luisa Zanele Macalagh”, who is also a joint liquidator of Leo Cash and Carry (Pty) Ltd.5 The sixth respondent is “Nedbank Limited”, a subsidiary of “Nedbank Group” established in 1888. It is a financial service provider in retail, wholesale, wealth management as well as insurance in Africa.[7]
Facts of the case
In August 2019, Leo Cash and Carry (Pty) Ltd approached the applicant “The Standard Bank of South Africa” to open a business current account.5 Upon the conclusion of the account being created, In December 2019, Leo Cash and Carry requested an overdraft facility of 40 million rands from the applicant, and as collateral the applicant requested an Unrestricted Pledge of Money Market Call Account with the balance of 15 million rands.5 Additionally, the applicant requested Leo Cash and Carry (Pty) Ltd to transfer its primary banking relationship to them and close the account held with Nedbank Limited.5 Leo Cash and Carry (Pty) Ltd had an overdraft facility of 10 million rands with Nedbank Limited.5 In January 2020, the applicant and Leo Cash and Carry (Pty) Ltd concluded the agreement.5 Leo Cash and Carry complied with the agreement and transferred 15 million rands in a series of transfers from their Current Account to the Money Market Account.5 However, on the 24th of February 2020, Leo Cash and Carry (Pty) Ltd, with their access to their overdraft facility with The Standard Bank of South Africa, transferred 10 million rands from the overdraft facility into their Nedbank account with an overdraft facility with Nedbank Limited of 10 million with aims of settling the debt.5 On the 28th of February 2020, the applicant received an e-mail from the South African Reserve Bank’s Financial Surveillance Department alerting them to freeze Leo Cash and Carry (Pty) Ltd.’s current account and their money market account due to a suspected contravention of exchange control in terms of the Currency and Exchanges Act 9 of 1933[8] and Regulations 22A and 22C of the Exchange Control Regulations of 1961.[9] From July 2019, the South African Reserve Bank’s Financial Surveillance Department had been investigating cryptocurrency transactions by several entities, of which Leo Cash and Carry (Pty) Ltd was part of, and the applicant did not know of this matter.5 Cryptocurrencies, Bitcoin to be more specific, had been acquired by these entities including Leo Cash and Carry (Pty) Ltd from a cryptocurrency exchange which were then transferred to foreign cryptocurrency exchanges.[10] On the 18th of March 2020 the block order was lifted, and the applicant was instructed by the Financial Surveillance Department (FinSurv) to keep surveillance on Leo Cash and Carry (Pty) Ltd.’s accounts.5 In September 2021, the applicant resulted in instituting a liquidation application of Leo Cash and Carry (Pty) Ltd.’s accounts, which was granted on the 13th of December 2021.5 The Financial Surveillance Department had requested the applicant and Leo Cash and Carry (Pty) Ltd.’s liquidators to make written representation as to why both the Money Merket Funds and the Nedbank funds should not be forfeited to the state in terms of Regulations 22B of the Exchange Control Regulations of 1961.5 On the 22nd of February 2023, the third respondent “Enoch Godongwana” acted in terms of this regulation and took the decision to forfeit the funds to the state despite the applicant’s representations. On the 24th of February the forfeiture order was published in the Government Gazette of South Africa.5
Issue
The issue of the case was whether the applicant was entitled to set aside the forfeiture of the funds in the Money Market Account of Leo Cash and Carry (Pty) Ltd.5 The applicant felt entitled to the funds due to the agreement held with Leo Cash and Carry (Pty) Ltd pertaining to the pledge and cession clause of the contract.5 The applicant emphasises that the agreement was made without knowledge of the exchange control contraventions by Leo Cash and Carry (Pty) Ltd.5 Additionally, the applicant stated that Leo Cash and Carry (Pty) Ltd owed them R41 443 642,97 and that as its secured creditor, it would rightfully acquire a significant portion of the funds upon the exposure of funds from the insolvent estate.5
Arguments of the parties
In terms of the funds in the Money Market Account, the applicant’s Counsel submitted that the respondents’ case was centred around the contraventions of Regulations 3(1)(c)[11] and (10)(c) of the Exchange Control Regulations of 1961[12] whereas cryptocurrency is neither a legal tender or currency in South Africa, highlighting that the Exchange Control Regulations of 1961 do not apply to cryptocurrencies.5 The applicants’ Counsel further submitted the definition of “Capital” in terms of the Exchange Control Regulations of 1961, stating that cryptocurrencies was not capital, arguing that cryptocurrencies was not a sum of money causing problems for the respondent in terms of Regulations 3(1)(c) as it dealt with restrictions of currency, gold, security, including the imports of South African banknotes. Applicant’s Counsel further emphasised that cryptocurrencies are not a payment as it is not recognised as a legal tender in South Africa.5
The respondents’ Counsel submitted that Leo Cash and Carry (Pty) Ltd was advised that it committed or acted with others with a common purpose to commit acts that were in contravention of the Exchange Control Regulations of 1961 and yet did not challenge that.5 Counsel further stating that the focus of this case is on the violations of Regulations 3(1)(c) and Regulations 10 (1)(c) even thought the forfeiture notice mentioned Regulations 19 and 22.[13] The respondents’ Counsel relied on the case of the South African Reserve Bank v Leathen N.O and others for interpretation.[14] The respondents’ Counsel emphasised that the contravention was not a matter of causa of payment but rather that cryptocurrency was covered by the Exchange Control Regulations, stating that money is defined as “foreign currency or any bill of exchange or other negotiable instrument”.9 Additionally, the respondents’ Counsel emphasised the definition of foreign currency, stating that it is any currency which is not a legal tender in the Republic of South Africa which includes any bill of exchange of credit money order, postal order or any other instrument of payment of currency payable in current unit which is not a legal tender in the Republic of South Africa.5 The respondents’ Counsel further stated that cryptocurrency is an instrument that facilitates payment in currency which is not a legal tender in the Republic of South Africa.5 Additionally, he stated that the moment South African rands were transferred into a South African cryptocurrency wallet is when it lost its character and becomes cryptocurrency and the rand value is lost for good from the South African balance sheet.5 The respondents’ Counsel stated in terms of the cession and pledge clause in the agreement, with reference to the agreement clauses that while a cession and pledge is transfers the power to realize the right to the bank, the power is not absolute.9 He highlighted that The Standard Bank of South Africa could only realize the collateral, which are the funds in the Money Market Account, is under 3 conditions which are a written notice of termination from the client, when the client is in default and the bank has formally withdrawn their rights and lastly when a court order is issued in the bank’s favour.8
Legal Reasoning
In terms of Section 9 (2)(b)(i) of the Currency and Exchanges Act 9 of 1933, it states “in the case of any person other than the offender or suspected offender, no such money or goods shall be blocked, attached, interdicted, forfeited and disposed of if such money or goods were acquired by such person bona fide for reasonable consideration as a result of a transaction in the ordinary course of business and not in contravention of the regulations”.[15] This highlights the applicant’s defence of the right to entitlement of the funds which is that the funds cannot be forfeited to the state in terms of Regulations 22B of the Exchange Control Regulations of 1961.[16] However, relevant case law is to be acknowledged to better solidify the applicants claim. In the case of South African Reserve Bank v Khumalo, the court described the difference between the handling of tainted (Regulations 22A) and untainted (Regulations 22C) assets under the Exchange Control Regulations of 1961 stating that freezing orders on untainted assets are subject tot the same time limits and return requirements of tainted assets.[17] In South African Reserve Bank v Shuttleworth the constitutional court clarified the purpose and functions of the exchange control regime emphasizing that an exit charge is not revenue-raising tax in a traditional sense but rather a regulatory tool used to manage the conditions under which capital is allowed to leave the Republic of South Africa.[18] In South African Reserve Bank v Leathen N.O and others, the court applied a purposive interpretation to the Exchange Control Regulations of 1961, redefining its role in protecting the national economy of South Africa, which is merely preventing loss, implementation of effective control and sustaining systematic stability.14 It alleviates the illicit flow of capital, which presents significant risks to the South African economy.
Judgement
Judge Motha. J ruled that the application by the applicant to set aside the 10 million in the account that Leo Cash and Carry (Pty) Ltd had with Nedbank Limited, together with the interest accrued dismissed.5 He ruled that the notice published by the third respondent in the Government Gazette on the 24th of February to declare forfeiture of funds to the state, the amount of R16 404 700.71 in the account held with The Standard Bank of South Africa, together with any interest accrued is set aside. The court concluded with the statement that South Africa’s Exchange Control Regulations do not apply to cryptocurrency transactions.5 The Court made it clear that until the law is amended, cryptocurrencies remain outside the scope of South Africa’s exchange control regime.[19]
Conclusion
Leo Cash and Carry (Pty) Ltd was not in contravention of the Exchange Control Regulations of South Africa as cryptocurrency transactions are not a legal tender in South Africa.5 Regulations 22A and 22C are irrelevant in this case. Hence, the forfeiture of the money in the Money Market Account was set aside.5 It is also clear and important to note that the regulation of cryptocurrencies or the amendment of South African Exchange Control Regulations is a need to protect the best interest of customers/clients as well as to protect the main obligation of the South African Reserve Bank which is to protect the currency of the rand and for the sustainable growth of the South African Economy.4 It is either the enactment of an independent legislature of the amendment of current legislature to ensure that systems are not used to aid and abet money laundering schemes or any fraudulent activities moving forward.
Reference(S):
Cases
Standard Bank of South Africa v South African Reserve Bank and Others, (2025) ZAGPPHC 481 (Motha.J) (RSA).
South African Reserve Bank v Leathen N.O and others, 5 SA 543 (Maya, P., concurring) (RSA).
South African Reserve Bank v Khumalo, (2010) 5 SA 449 (Harms, DP., concurring) (RSA).
South African Reserve Bank v Shuttleworth, (2015) 5 SA 146 (Mogoeng, CJ., concurring) (RSA).
Legislature
The Constitution of South Africa, 1996, §223 (RSA).
The South African Reserve Bank Act,1989 (RSA).
The Currency and Exchanges Act,1933 (RSA).
Exchange Control Regulations, 1961, Reg. 22 (RSA).
Exchange Control Regulations, 1961, Reg. 19 (RSA).
Exchange Control Regulations, 1961, Reg. 3 §1 (RSA).
Exchange Control Regulations, 1961, Reg. 10 (RSA).
Internet Sources
Cent Capital, Standard Bank Group: Profile and Overview, cent.capital (Nov.16, 2025), www.cent.capital.
Standard Bank, Standard Bank Group: About Us, standrdbank.com, https://www.standardbank.com.
Financial Institutions Legal Snapshot, Cryptocurrencies falls outside current exchange control regulations, financialinstitutionslegalsnapshot.com (May 22, 2025), https://www.financialinstitutionslegalsnapshot.com/2025/05/22/cryptocurrencies-fall-outside-current-exchange-control-regulations
Stefan Le Roux, South Africa Court Rules in favour of Crypto Currency Trade, irglobal.com (May. 30, 2025), https://irglobal.com/article/south-africa-court-rules-in-favour-of-crypto-currency-trade.
Nedbank Group, Who Are We, group.nedbank.co.za, https://group.nedbank.co.za.
Moonstone, Cryptocurrencies outside Exchange Control Regulations (May. 29, 2025), https://www.moonstone.co.za/cryptocurrencies-outside-exchange-control-regulations-court-rules.
[1] Cent Capital, Standard Bank Group: Profile and Overview, cent.capital (Nov.16, 2025), www.cent.capital.
[2] Standard Bank, Standard Bank Group: About Us, standrdbank.com, https://www.standardbank.com.
[3] The Constitution of South Africa, 1996, §223 (RSA).
[4] The South African Reserve Bank Act,1989 (RSA).
[5] Standard Bank of South Africa v South African Reserve Bank and Others, (2025) ZAGPPHC 481 (Motha.J) (RSA).
[6] Moonstone, Cryptocurrencies outside Exchange Control Regulations (May. 29, 2025), https://www.moonstone.co.za/cryptocurrencies-outside-exchange-control-regulations-court-rules.
[7] Nedbank Group, Who Are We, group.nedbank.co.za, https://group.nedbank.co.za.
[8] The Currency and Exchanges Act,1933 (RSA).
[9] Exchange Control Regulations, 1961, Reg.22 (RSA).
[10] Stefan Le Roux, South Africa Court Rules in favour of Crypto Currency Trade, irglobal.com (May. 30, 2025), https://irglobal.com/article/south-africa-court-rules-in-favour-of-crypto-currency-trade.
[11] Exchange Control Regulations, 1961, Reg. 3 §1 (RSA).
[12] Exchange Control Regulations, 1961, Reg. 10 (RSA).
[13] Exchange Control Regulations, 1961, Reg. 19 (RSA).
[14] South African Reserve Bank v Leathen N.O and others, 5 SA 543 (Maya, P., concurring) (RSA).
[15] Currency and Exchanges Act,1933 §9(2)(b)(i) (RSA).
[16] Exchange Control Regulations, 1961, Reg. 22B (RSA).
[17] South African Reserve Bank v Khumalo, (2010) 5 SA 449 (Harms, DP., concurring) (RSA).
[18] South African Reserve Bank v Shuttleworth, (2015) 5 SA 146 (Mogoeng, CJ., concurring) (RSA).
[19] Financial Institutions Legal Snapshot, Cryptocurrencies falls outside current exchange control regulations, financialinstitutionslegalsnapshot.com (May 22, 2025), https://www.financialinstitutionslegalsnapshot.com/2025/05/22/cryptocurrencies-fall-outside-current-exchange-control-regulations.
