South African Reserve Bank probes Kastelo over R4bn transfers

The South African Reserve Bank (SARB) has launched an investigation into the cryptocurrency arbitrage firm Kastelo regarding alleged contraventions of exchange control regulations. The probe involves approximately R4 billion in fund transfers conducted between November 2021 and November 2025.

Kastelo, founded by Democratic Alliance (DA) MP Mark Burke, is accused by SARB investigators of systematically circumventing exchange controls by using third-party allowances to externalize funds for the firm's benefit. Allegations include that clients were incentivized with bonuses to allow the use of their allowances and that many were unaware foreign accounts had been opened in their names.

Kastelo has rejected these allegations, stating that clients were not kept in the dark. The company maintains that customers watched a compulsory video and signed a discretionary mandate before any trades were placed. Kastelo asserts its service allowed clients to use their own allowances to profit from price gaps between local and offshore crypto markets, acting on client mandates with the required approvals from authorized dealers and the South African Revenue Service (SARS). Approximately R13 million in client money remains frozen following the bank's actions.