South Africa Issues Draft Cross-Border Crypto Regulation, Clarifies Reporting Obligations

According to ME News, on August 3 (UTC+8), the South African Department of Finance and the South African Reserve Bank jointly released a draft of the Crypto Asset Manual, which for the first time clearly defines under what circumstances cross-border transfers of crypto assets constitute regulated and reportable events. This move builds upon capital flow rule reforms proposed in April. The draft requires individuals to conduct cross-border crypto asset transfers through licensed service providers, with all such transactions reported to FinSurv, the financial regulatory unit of the South African Reserve Bank. The regulation aims to prevent crypto assets from being used to circumvent existing foreign exchange controls and to assist authorities in detecting and blocking illicit fund flows. Under the draft, a cross-border transaction is only triggered when assets are transferred from a local licensed crypto asset service provider to an overseas provider, or into a private non-custodial wallet; buying or selling crypto assets for rand through a local service provider does not trigger reporting obligations. Currently, individuals are only permitted to transfer crypto assets overseas within their existing foreign exchange allowance. The South African Reserve Bank stated that this framework does not grant crypto assets legal tender status, nor does it yet distinguish between different types of crypto assets—research in this area is still ongoing. The public comment period for the draft ends on September 30. (Source: Foresight News)