South African judges use apartheid era law to slam central banks to regulate cryptography

A South African judge denounced South Africa’s central bank for using outdated exchange control laws from the apartheid era to regulate cryptocurrencies.

Judge: Laws in the Apartheid Era that are not suitable for cryptocurrency regulations

A high court judge criticized the South African Reserve Bank (SARB) for its continued reliance on outdated exchange control laws to regulate cryptocurrencies. In a recent ruling, Judge Mandrenkosi Mosa suggested that the SARB has no excuse to use apartheid-era law to control cryptocurrencies that have existed for 15 years.

According to a South African judge, the Apartheid administration was established in 1961 by STEM Capital Flight. Motha questioned whether such laws were “appropriate for purposes” to address cryptocurrency.

“Cryptocurrency has been around for over 15 years. It’s not like SARB has had a nap,” the judge said. “As well, intellectual property rights had a niche engraved for them in exchange control regulations. Cryptocurrencies require legislative caution.”

The ruling comes from a case in which the local financial institution, Standard Bank, challenged the SARB decision to apply the provisions of the Excon Act when seizing the assets of bank clients. The client owed $2.28 million (R41 million) to the standard bank, and the financial institutions wanted a recovery through liquidation.

As MyBroadband’s report points out, Standard Bank has been blocked from proceeding with liquidation after SARB seized assets of an unidentified company through its financial monitoring division, Finsurv. This followed an investigation in which the client found that they were in violation of the Exchange Management Act when they purchased Bitcoin and transferred them to overseas exchanges. However, Standard Bank argued that Finsurv’s claims about foreign exchange violations are unbearable because the Excon Act does not cover cryptocurrency.

Meanwhile, in addition to accusing the SARB of its reliance on outdated law, high court judges also challenged the notion that cryptocurrency is indeed a form of currency or money. According to the judge, cryptocurrency cannot meet the criteria that are considered money.

“Cryptocurrency is not money,” the judge argued. “By looking at the definition of money, including foreign currency, the construction of cryptocurrency as money is tense and unrealistic.”