South African fintech Kastelo is under heightened regulatory and political scrutiny after the Gauteng Division of the High Court in Johannesburg dismissed its bid to overturn a South African Reserve Bank blocking order on funds held at Access Bank. The order stems from an ongoing SARB investigation into suspected breaches of South Africa’s exchange-control rules linked to foreign currency transactions and offshore crypto assets. The July 28, 2026 ruling did not establish wrongdoing by Kastelo or its executives, but found that SARB had sufficient grounds to keep the freeze in place while its investigation continues.
Investigation Triggered by Access Bank
The investigation was reportedly initiated after Access Bank identified suspicious transactions and conducted an internal forensic review of Kastelo’s activities. The bank referred its concerns to SARB, prompting a broader examination of witness accounts, whistleblower information, and cross-border foreign exchange data covering transactions from November 2021 through November 2025. On November 24, 2025, SARB issued a blocking order preventing withdrawals from Kastelo’s Access Bank account after reviewing activity recorded during the preceding months.
SARB Alleges Exchange-Control Violations
According to evidence before the court, SARB suspects exchange-control violations totaling at least R4 billion, including the use of South African clients’ personal foreign exchange allowances to acquire offshore crypto assets. The regulator alleges that some customers were financially incentivized to use their allowances, while others may not have fully understood how offshore accounts opened in their names were being used. SARB also cited loans provided to clients to fund transactions, including cases involving borrowers with relatively modest monthly incomes, which it characterized as simulated arrangements intended to circumvent exchange-control requirements.
Court Backs SARB’s Blocking Order
The High Court rejected Kastelo’s application to release the funds and ordered the company to pay SARB’s legal costs on a punitive attorney-and-client scale, including the costs of two counsel. The court held that the central bank did not need to prove a final contravention before issuing the order because the relevant threshold was whether SARB had a reasonable, objectively supported suspicion of regulatory breaches. It also rejected Kastelo’s procedural challenge, finding that the company was not entitled to make representations before the order was imposed and that no factual dispute required a trial.
Kastelo Defends Its Business Model
Kastelo has defended its former business model as a legitimate cryptocurrency arbitrage service intended to help clients benefit from price differences between South African and international crypto markets. The company has denied that customers were kept unaware of offshore accounts or transactions conducted in their names, while confirming that it stopped offering the arbitrage service after SARB imposed the blocking order. Kastelo is chaired by Democratic Alliance MP Mark Burke, who previously served as chief executive before Nicholas Burke assumed day-to-day leadership.
Political Pressure Builds
The case has drawn political attention because Burke serves as the Democratic Alliance’s federal finance chairperson and holds parliamentary responsibilities connected to finance and appropriations. The Economic Freedom Fighters has accused the DA of hypocrisy over the allegations, while the African National Congress has called for Burke to be removed from finance-related parliamentary committees because of the potential conflict created by the SARB investigation. Burke says he is not personally under investigation, has not been accused of misconduct, and has recused himself from matters involving SARB since entering Parliament.
The dispute leaves Kastelo under significant regulatory pressure as SARB continues examining whether its crypto arbitrage activities breached South Africa’s exchange-control framework. The High Court ruling allows the central bank to maintain the freeze during that investigation, but it does not amount to a final finding that the alleged contraventions occurred or that any individual associated with Kastelo committed an offense. The outcome of SARB’s inquiry and any further legal proceedings will determine whether the allegations develop into formal enforcement action or are ultimately dismissed.