South Africa overhauls exchange controls to regulate crypto transactions

South Africa is rapidly updating its exchange control rules, particularly for cross-border crypto asset transactions. In April, the Treasury released the draft Capital Flow Management Regulations of 2026 (draft CFM Regulations) for public comment, aiming to replace the outdated Exchange Control Regulations of 1961. The new rules seek to align with international standards from the OECD and FATF, bring crypto assets under regulatory oversight, clarify exemptions, and introduce sanctions for non-compliance.

The draft CFM Regulations work alongside the draft Crypto Manual, which outlines how the Treasury and the South African Reserve Bank plan to regulate crypto transactions. The manual defines cross-border crypto transactions, sets authorization requirements for Crypto Asset Service Providers (CASPs), and details reporting obligations. It also specifies when a crypto transaction crosses borders, such as when assets move between domestic and offshore CASPs or into non-custodial wallets.

Individuals can still transfer crypto within existing allowances, such as the R2m single discretionary allowance or the R10m foreign capital allowance. However, corporate entities face stricter rules, as any cross-border crypto transfer is classified as non-permissible. CASPs will need authorization from the Reserve Bank’s Financial Surveillance Department (FinSurv) and must monitor and report all transactions involving South African custodial wallets.

Enforcement measures include administrative sanctions like fines, public reprimands, and revocation of authorization. Criminal penalties have also increased, with fines up to R1m or the full value of the asset involved, and potential imprisonment for up to five years. The Treasury may grant exemptions, and the overall shift is towards a 'positive bias' approach, focusing on robust reporting and surveillance rather than pre-approval for every transaction.