Luno formally challenges South Africa’s proposed capital flow regulatory rules

Odaily Planet Daily News Cryptocurrency exchange Luno has formally challenged South Africa’s proposed foreign exchange law reforms, arguing that the National Treasury’s plan to include digital assets under capital flow regulations bypasses parliament and involves the property and privacy rights of millions of South Africans.



In its submission, Luno pointed out that the draft contains provisions for asset seizure without court orders, forced liquidation, and sanctions that could lead to business termination. Violators could face up to five years in prison, fines of up to $53,000, or both.



Luno recommends that the final framework for crypto capital flows be established through an act of parliament, classifying crypto assets purchased and held on licensed exchanges in South Africa as domestic assets, and distinguishing between different digital asset categories based on their economic functions.



Luno also suggests removing mechanisms for forced sales and warrantless asset seizures, and allowing non-resident international trading companies to continue accessing the South African market with appropriate registration, in order to maintain market liquidity.