South Africa’s Finance Minister Enoch Godongwana has confirmed that the South African Reserve Bank is investigating fintech firm Kastelo over suspicious foreign exchange transactions totaling roughly R4 billion. According to parliamentary disclosures, the ongoing probe centers on allegations that client allowances were used to acquire crypto assets abroad before being liquidated through local providers.
SARB Targets R4 Billion in Suspected Forex and Crypto Transactions
The Financial Surveillance Department of the South African Reserve Bank initiated the probe around October 2025. Finance Minister Enoch Godongwana confirmed the investigation in a written parliamentary response. Investigators initially focused on transactions conducted between August 4 and November 21, 2025. Godongwana noted that the scope may expand if regulators identify additional activity outside this timeframe.
Regulators flagged transactions involving Single Discretionary Allowances at approximately R6.688 million. Meanwhile, transactions tied to Foreign Investment Allowances reached an estimated R3.496 billion. Godongwana emphasized that these figures remain subject to change pending the final findings of the ongoing inquiry.
High Court Dismisses Challenge Against Access Bank Account Blocking Order
The investigation began after Kastelo’s authorised dealer, Access Bank, raised the alarm. Court records show the bank spotted suspicious transactions during an internal forensic review and reported them directly to the central bank. Prompted by these findings, the Reserve Bank issued a blocking order in November 2025 to freeze withdrawals on Kastelo’s Access Bank account.
Kastelo fought the directive in court. However, on July 28, 2026, the Gauteng Division of the High Court in Johannesburg dismissed the company’s application and ordered it to cover the Reserve Bank’s legal costs. The presiding bench ruled that the central bank only needed to establish a “reasonable suspicion” of exchange-control contraventions to issue a blocking order, rather than proving an actual violation had occurred.
Kastelo Business Model and Co-Founder Mark Burke Respond
The Reserve Bank alleges that Kastelo’s operations used client allowances to buy foreign currency and offshore crypto assets. Investigators also are examining loans allegedly provided to clients to help them maximize their allowances. Regulators are reviewing whether certain clients were entirely unaware that foreign bank accounts had been opened in their names.
Kastelo has defended its operations, maintaining that its model allowed clients to exploit price discrepancies between South African and international cryptocurrency markets. The company stated it halted the arbitrage service after regulators issued the blocking order, and denied keeping clients in the dark regarding offshore accounts.
Mark Burke, Kastelo co-founder and former Democratic Alliance federal finance chairperson, distanced himself from the ongoing litigation and daily management. Burke stated that he resigned from the company in 2024 to pursue politics and stepped down as chairperson of the broader Kastelo group in February 2026. He maintained that no allegations of wrongdoing have been leveled against him personally.
Regulatory Action and Preservation of Funds
Administrative enforcement has already commenced. The central bank issued an order under Exchange Control Regulations that preserves approximately R15 million. Godongwana stated that investigators will determine whether to refer the matter to law enforcement or other regulatory bodies once the full findings are complete.
Frequently Asked Questions About the Kastelo Investigation
Why is the South African Reserve Bank investigating Kastelo?
The Reserve Bank is investigating suspected exchange-control contraventions involving approximately R4 billion in foreign exchange transactions tied to offshore crypto asset purchases.
What triggered the central bank inquiry?
Access Bank, which served as Kastelo’s authorised dealer, launched an internal forensic review and reported suspicious transactions to the Reserve Bank.
What was the outcome of the High Court litigation?
The Gauteng Division of the High Court in Johannesburg dismissed Kastelo’s challenge against the Reserve Bank’s blocking order on July 28, 2026, ordering the firm to pay legal costs.
Is former DA politician Mark Burke personally implicated?
Mark Burke has stated that he is not personally subject to any investigation, noting he left the company’s daily operations and resigned as chairperson.
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