The South African Central Bank advocates “outdated” exchange control laws that are still effective in cryptocurrency regulations

The South African Central Bank appealed a High Court ruling that criticized the use of outdated exchange control laws to regulate cryptocurrencies.

Central bank says the high court made a mistake

The Reserve Bank of South Africa (SARB) appealed a High Court ruling that criticized central banks’ reliance on outdated exchange control laws to regulate cryptocurrencies. In an appeal filed June 2, SARB argues that the High Court has made a mistake in supporting Standard Bank, a local financial institution that is plagued by the central bank’s decision to seize Bitcoin belonging to its clients.

According to a MoneyWeb report, the Central Bank of South Africa claims that the client in question, Leo Cash and Carry, has transferred 4,400 Bitcoins to Seychelles-based exchange Huobi as part of a scheme that “directly or indirectly exports capital, foreign currency, and capital from the Republic, directly or indirectly.” Central banks are having problems with the court’s decision that cryptocurrency is not money or foreign currency from an exchange management perspective, according to the report.

As reported by Bitcoin.com News, Pretoria High Court judge Mandrenkosi Mosa rejected the concept that cryptocurrency is money. He also questioned whether the exchange management regulations enacted in 1961 were “appropriate for purposes” to regulate cryptocurrencies. Motha used apartheid-era law to suggest that it could not be used to regulate cryptocurrencies that have only existed for 15 years.

However, in its appeal, the South African Central Bank erred in its decision as the Regulation 22C of the Exchange Control Act allowed the SARB to block transactions that it appears to be in violation of the regulations. The central bank argues that if the court is free to issue a judgment, the Standard Bank application will be rejected.

Future Forex CEO Harry Scherzer accused the central bank of responding to the SARB’s decision to appeal the High Court’s decision.

“It was relatively clear that the Reserve Bank made a mistake in the sense that it could avoid switching controls that would essentially make the entire exchange control redundant, because you can basically send it overseas as much money as you would with cryptography.

However, the CEO praised the SARB’s decision to appeal the ruling promptly. This is a move to effectively bring South Africa back to its status quo.