South African Crypto Firms Battle Cross-Border Transaction Restrictions

A coalition of 171 organizations and nearly 4,000 individuals has come together to oppose draft rules on capital flows and cross-border transactions involving crypto assets in South Africa. The group, known as Catastrophe, includes prominent exchanges VALR, Luno, and AltCoinTrader.

The proposed rules, drafted by the National Treasury and the South African Reserve Bank, would prohibit businesses from using crypto assets to import or export capital, even if the related commercial activity is lawful. This restriction would also apply to non-custodial wallets, where residents can transfer crypto assets from a licensed local exchange to a private wallet, but sending those assets back to a South African crypto-asset service provider is classified as a prohibited transaction.

Binance South Africa General Manager Hannes Wessels expressed concerns about the draft regulations, urging regulators to distinguish between the use of crypto assets for payments and speculative capital outflows. He noted that restrictions on returning funds from private wallets to regulated exchanges could encourage users to keep assets abroad or trade through unverified peer-to-peer markets.