Kastelo, the fintech at the centre of a South African Reserve Bank exchange control investigation that has ensnared DA MP Mark Burke, has rejected the central bank’s core allegation that its clients were unaware that billions of rand were being moved offshore in their names.
The company has told TechCentral that every customer watched a compulsory video and signed a discretionary mandate before a single trade was placed.
The company was responding to questions after the investigation was first reported by Business Day. In an affidavit, Reserve Bank financial surveillance investigator André Malherbe alleged that:
- Kastelo systematically circumvented exchange controls by using third parties’ allowances to externalise funds for its own benefit;
- Clients were incentivised with bonuses to allow the use of their allowances; and
- Most were unaware foreign accounts had been opened in their names.
The Bank put Kastelo’s portfolio at R891-million in single discretionary allowances and R8.9-billion in foreign investment allowances, and flagged a reasonable suspicion of exchange control contraventions worth about R4-billion between November 2021 and November 2025. It blocked a portion of Kastelo’s funds held at Access Bank in November last year. Kastelo told TechCentral that about R13-million in client money remains frozen.
Kastelo, an authorised financial services provider, said its arbitrage service simply let clients use their own allowances to profit from the gap between local and offshore crypto prices. Client money, in rands, was used to buy foreign currency through an authorised dealer, sent abroad to buy crypto more cheaply, then returned and sold at a higher price locally.
“This was done on behalf of our clients, on their mandate, for their benefit, and with the required approvals of our authorised dealer and Sars,” it said. It rejected the bonus claim: “We do not agree with the statement that ‘clients were paid bonuses to allow the use of their allowances’.”
Daily Maverick has reported that the bonuses ranged from R2 000 to R10 000 and that Kastelo lent clients money to use more of their allowances, with investigators finding that many were low-income earners who could not realistically afford the loans.
On consent, the company said every prospective client had to watch an explanatory video “as a hard block” before signing up, spelling out that a foreign trading account would be opened and that Kastelo was mandated to act on it.
The court fight
“Before the client could indicate their agreement by signature on screen, they were again made aware, in text and via tick box functionality, that Kastelo would open the required accounts and trade on their behalf,” it said. Only “a small number of clients”, those with an active trade when the account was blocked, were affected.
It told TechCentral that January’s high court ruling turned only on urgency and that the substantive review, heard on 9 June, dealt narrowly with whether the Reserve Bank had followed correct procedure, adding that the court made no finding on its business model or on any alleged contravention.
Read: SA companies could face cross-border crypto ban
But on 28 July, according to reports of the ruling, acting judge S Johnson dismissed the application to set aside the blocking order with punitive costs, finding that the Reserve Bank had established a valid and objectively reasonable suspicion of exchange control contraventions.
That does not settle whether the arbitrage model is lawful, a question for the Reserve Bank’s broader investigation, but it is why the account, as Kastelo put it, “remains blocked”.
Kastelo was founded by DA federal finance chairman Mark Burke and is run by his brother, Nicholas. In a statement, Burke sought to distance himself, saying he “resigned from Kastelo in 2024 to pursue a political career” and “ceased serving” as chairman of the broader group in February 2026. Kastelo’s own website still lists him as “founder and chairman”.
Burke, who holds a PhD in econometrics from Cambridge and was elected to the DA’s finance role in April, replacing Dion George, said he had “always acted ethically and lawfully” and had recused himself from all parliamentary matters involving the Reserve Bank to avoid a conflict of interest. “No allegation of misconduct or malfeasance has been made against me personally,” he said.
DA leader Geordin Hill-Lewis has backed him, while the ANC caucus has called for his removal from parliament’s finance committees pending the outcome.
Under exchange control rules, the foreign investment allowance lets tax-compliant adults move up to R10-million offshore a year, on top of the R2-million single discretionary allowance, which rose from R1-million this year. The Reserve Bank’s affidavit argues that exchange control exists to protect the country’s foreign currency reserves, and that Kastelo’s model depletes them regardless of any inflow, a risk to South Africa’s external position.
The case comes amid a move by regulators to tighten their stance on crypto and cross-border flows. The Reserve Bank has flagged crypto as a possible risk to financial stability, national treasury has proposed rules that could amount to a cross-border crypto ban, which VALR and others have opposed, and conflicting court judgments have left the law unsettled. For the underlying rules, see our explainer on cryptocurrencies and exchange control. — © 2026 NewsCentral Media
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