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SARS tightens grip on crypto as legal battle looms

Nicola Mawson
By Nicola Mawson, Contributing journalist
Johannesburg, 02 Oct 2025
Crypto asset taxation is a priority for SARS.
Crypto asset taxation is a priority for SARS.

The South African Revenue Service (SARS) is ramping up oversight of crypto-currency transactions as legal uncertainty persists over whether assets fall under foreign exchange controls – a question the Supreme Court of Appeal will address next year.

The taxman previously expressed concern over the fact that more than 5.8 million South Africans hold crypto assets, while Southern Africa has one of the highest rates of Bitcoin adoption globally.

A landmark Standard Bank case earlier this year created a grey area as to whether current apply to digital money cross-border transactions.

The bank successfully challenged the South African Reserve Bank's (SARB’s) attempt to forfeit R40 million in collateral tied to Leo Cash and Carry after the retailer traded in crypto overseas.

The judge ruled that apartheid-era exchange control laws don't apply to digital currencies.

SARB has appealed to the Supreme Court of Appeal to overturn the High Court order. Law firm ENS Africa argues the appeal suspends the High Court judgement, but attorneys Beatrix van der Spuy and Vaughn Harrison of Thomson Wilks contend that SARB approval isn't currently required to move crypto offshore.

"The Pretoria High Court ruling creates a narrow window of flexibility to move crypto offshore. But this is not a free pass, as SARS is intensifying its oversight, and legislative amendments are on the horizon," the Thomson Wilks lawyers warn.

Power shift

Exchange control regulations designed for an analogue economy struggle with today's borderless digital world. “Even minors can open global accounts or buy crypto or overseas products, such as running shoes, using a parent’s credit card,” say Van der Spuy and Harrison.

As a result, control over cross-border money flows is shifting from the central bank to the taxman. While SARB historically managed foreign currency through authorised dealers, enforcement is increasingly moving to SARS, which now taxes South African residents on worldwide income, note Van der Spuy and Harrison.

SARS plans to double staff in its crypto tracking division and has established a specialised Crypto Asset Unit, say the lawyers. It's mining transactional data, collaborating with SARB, and accessing trading information directly from crypto exchanges.

Through multilateral agreements, SARS is also exchanging information with tax authorities globally. Accounting firm BVSA noted in July that SARS can now identify taxpayers who traded crypto but failed to disclose it.

The tax authority says it uses artificial intelligence, machine learning and algorithms to close the reporting gap.

Capital gains tax applies to crypto disposals even when assets move offshore, say Van der Spuy and Harrison. Annual tax returns now include detailed questions about crypto transactions, values, and whether gains have been declared, the two lawyers say.

"Failing to disclose crypto activity now risks penalties, interest and even criminal sanctions. Expect amendments to the Exchange Control Regulations to be implemented in the coming months.”

Van der Spuy and Harrison add that “crypto asset taxation has become a priority”.

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