SARB Investigates Kastelo Over R4 Billion Exchange Control Violations

SARB Investigation and the R4 Billion Allegations

Godongwana disclosed the ongoing inquiry in a written parliamentary response regarding reports that the central bank identified a reasonable suspicion of exchange-control breaches. The investigation commenced around October 2025 and initially focused on transactions conducted between August 4 and November 21, 2025. “It is correct that the SARB is investigating the company concerned and that an affidavit by an investigator in the Financial Surveillance Department of the SARB identified a reasonable suspicion of exchange-control contraventions,” Godongwana stated in his parliamentary reply. He added that the scope of the probe may expand if additional transactions outside the initial window are uncovered. According to the finance minister, the central bank’s actions stem from allegations that foreign exchange transactions amounting to roughly R4 billion were conducted in violation of Exchange Control Regulations. Authorities suspect those funds ultimately financed the purchase of overseas crypto assets, which were subsequently liquidated via local crypto asset service providers. The regulatory filings indicate that transactions involving clients’ Single Discretionary Allowances totaled approximately R6.688 million. Meanwhile, transactions involving Foreign Investment Allowances reached an estimated R3.496 billion. Godongwana emphasized that these financial figures remain preliminary and subject to the final findings of the ongoing investigation.

High Court Ruling and Client Account Scrutiny

The regulatory inquiry was originally triggered when Kastelo’s authorized dealer, Access Bank, reported suspicious transactions following its own forensic review. In November 2025, the South African Reserve Bank issued a blocking order that prevented withdrawals from Kastelo’s account at Access Bank. Kastelo subsequently challenged the blocking order in court. However, the Gauteng Division of the High Court in Johannesburg dismissed the application on July 28, 2026, and ordered the company to pay the central bank’s legal costs. The court ruled that the SARB needed only a reasonable suspicion to issue the blocking order and was not required to prove an actual contravention had already occurred. Investigators also examined instances where clients were allegedly unaware that foreign bank accounts had been opened in their names. Godongwana noted that whether clients actually possessed knowledge of those accounts forms a core component of the ongoing probe.

Kastelo Business Model and Leadership Response

Kastelo was co-founded by Mark Burke, the former Democratic Alliance (DA) federal finance chairperson. Burke resigned from the company in 2024 to pursue a political career and stepped down as chairperson of the broader Kastelo group in February 2026. Burke rejected any suggestion that he personally faces an investigation or has been found guilty of wrongdoing. “I am not the chairperson of Kastelo Proprietary Limited, the company that is the subject of the litigation, and I am not involved in its daily operations,” Burke said. “The High Court judgment does not make any finding of wrongdoing against Kastelo, nor myself.” He noted that the court proceedings strictly addressed whether the central bank possessed grounds to issue the blocking order while the wider investigation proceeds. Kastelo has defended its operating model, stating that it enabled clients to capitalize on price disparities between South African and international cryptocurrency markets. The firm denied keeping clients in the dark regarding offshore accounts and confirmed that it discontinued the arbitrage service after authorities issued the blocking order.