VALR CEO Says R2.2 Billion in Potential Crypto Investment Is on Hold Over South Africa’s Draft Rules
At least R2.2 billion in potential foreign investment into South African crypto businesses has been put on hold while investors wait for clarity over proposed cross-border crypto rules, according to VALR co-founder and CEO Farzam Ehsani.
Ehsani made the claim in a Moneyweb Crypto Pod interview published on September 18, 2026.
He said the affected transactions include a proposed R1.6 billion investment by an international private-equity company, alongside two other potential deals worth R250 million and R350 million. Together, that comes to R2.2 billion.
The investors and transactions have not been publicly identified or independently verified by Moneyweb. The figure is based on information Ehsani says he received from founders involved in the deals.
VALR Says Investors Are Waiting for Clarity
According to Ehsani, he has spoken directly with founders who are negotiating with the investors concerned. He told Moneyweb that the investors had effectively told those companies they were putting their plans on hold until there was more certainty about the proposed regulatory framework.
The investments could still proceed. But VALR’s argument is that uncertainty over the proposed rules is already influencing how international investors view South African crypto businesses.
What Rules Is South Africa Proposing?
The dispute centres on South Africa’s proposed framework for treating crypto assets in cross-border transactions.
On August 3, 2026, the National Treasury and South African Reserve Bank published a Draft Crypto Assets Manual for cross-border activities. The manual is intended to work alongside the Draft Capital Flow Management Regulations, 2026, which were released for public comment in April.
According to the South African Reserve Bank, the proposed framework is designed to clarify when a crypto transaction becomes a cross-border capital flow and when it must be reported to the Financial Surveillance Department, commonly known as FinSurv.
The proposals are not yet final law. The SARB says both the draft manual and the wider regulations remain subject to refinement following public comments and stakeholder engagement. Comments on the crypto manual remain open until September 30, 2026.
When Would Crypto Become a Cross-Border Transaction?
The proposed rules attempt to define the point at which a crypto transfer leaves or enters South Africa for exchange-control purposes. The SARB says the trigger would include transfers between:
- a South African authorised crypto asset service provider and an offshore crypto provider; or
- a domestic authorised crypto provider and a non-custodial wallet where the transaction creates a cross-border inflow or outflow.
Those transactions would need to be reported to FinSurv.
Under the current draft, the SARB says individuals would be allowed to externalise crypto assets through authorised crypto providers using their existing single discretionary allowance or foreign capital allowance. The central bank says its goal is to identify cross-border flows consistently, improve reporting and monitoring, and manage risks associated with crypto assets. It also stresses that the proposed framework does not make cryptocurrency official money in South Africa.
VALR Thinks the Draft Goes Too Far
VALR agrees that cross-border financial activity should be monitored. Its disagreement is over how that monitoring should work. In its public response to the proposals, VALR argues that parts of the draft could treat crypto more restrictively than conventional financial rails performing similar economic functions.
The exchange says that, under its interpretation of the current draft, South African businesses could be prevented from using crypto assets or stablecoins for certain cross-border payments.
VALR argues that this would create a situation where a business could legally make an international payment through a traditional bank or authorised foreign-exchange dealer but could not make an economically similar payment using regulated crypto infrastructure.
That interpretation is VALR’s position on the draft, not a statement that the final rules will definitely work that way. The SARB, meanwhile, describes the framework as an activity-based approach intended to provide oversight of cross-border flows and emerging crypto risks.
Stablecoins Are a Major Part of the Argument
Stablecoins sit near the centre of the disagreement. Companies increasingly use dollar-linked stablecoins such as USDT and USDC for international settlement, particularly where conventional cross-border payments are expensive or slow.
VALR argues that prohibiting or heavily restricting businesses from using these assets for international payments could push activity offshore rather than eliminate it.
In its campaign against the proposed rules, VALR says businesses should be allowed to use crypto and stablecoin payment rails as long as the same reporting, surveillance and capital-flow limits that apply to conventional financial institutions are observed.
Ehsani’s proposed alternative is therefore not a world without exchange controls. He argues for applying the controls to the value being transferred rather than the technology used to transfer it.
Self-Custody Is Another Flashpoint
The treatment of private wallets has also become controversial. A self-custody wallet allows a person to control their crypto directly rather than leaving it on an exchange. Under the SARB’s draft framework, transfers from an authorised domestic crypto provider to a non-custodial wallet can constitute reportable cross-border flows depending on the circumstances. VALR and other industry critics say the rules could create what they describe as a “one-way door” for some self-custody transactions.
In his Moneyweb interview, Ehsani argued that a person could potentially withdraw crypto from a regulated South African platform into a private wallet but face restrictions when trying to return those assets to the regulated financial system. He compared that to allowing someone to withdraw cash from an ATM but refusing to let them deposit it back into a bank.
Again, that is Ehsani’s interpretation and criticism of the draft framework. The rules are still being consulted on and could change before implementation.
South Africa’s Crypto Industry Has Organised Against the Draft
The debate has already moved beyond VALR.
Several South African crypto and financial-services companies have joined a coalition called CATASTROPHE, short for the Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy. The coalition includes companies such as VALR, Luno, AltCoinTrader and EasyEquities, according to Moneyweb’s reporting on its launch.
Its members argue that South Africa should regulate economic activity according to its risks rather than imposing different treatment simply because blockchain technology is involved.
Supporters of tighter controls, on the other hand, point to the need to monitor international capital movements, money laundering, sanctions risks and other illicit financial flows.
South African regulators have said the proposed framework is intended to strengthen oversight while responding to new financial technologies.
The disagreement is therefore not really over whether crypto should be regulated. The fight is over how.
VALR Says It Will Follow the Final Rules
Despite its objections, Ehsani told Moneyweb that VALR would comply with whatever framework is ultimately adopted. VALR’s own guidance to customers also stresses that the proposals remain drafts and that customers can currently continue trading, depositing and withdrawing crypto as usual.
There has been no immediate change to normal VALR transactions simply because the draft regulations were published.
South Africa has proposed new rules. It has not yet implemented the final version of them.
Could This End Up in Court?
Possibly.
Ehsani told Moneyweb that the industry could consider legal action if its concerns are not resolved, pointing to issues including property and privacy rights.
The public-consultation process is still underway, and the SARB has explicitly said the framework may be revised after reviewing submissions.
VALR has also said it intends to engage with regulators and submit detailed comments rather than simply oppose regulation outright.
The next important date is September 30, 2026, when public comments on the draft Crypto Assets Manual close. What happens after that will determine whether today’s warnings become tomorrow’s rules.
