The Fight to Protect Bitcoin Self-Custody in South Africa with Ricki Allardice | SLP746

**Ricki Allardice** (0:00)
If Adopted Wholesale is initially proposed, it would make self-custody illegal.
And so obviously, I've seen on Twitter, people are saying, you know, you can't ban Bitcoin, you can only ban yourself. And I'm like, yes, I totally agree. But the people that get caught up in the middle of this are the ones who are going to suffer.

**Stephan Livera** (0:15)
Hi, everyone. Welcome back to Stephan Livera Podcast. Today, we're doing the Fast Edition. Joining me today is Ricki Allardice from Adopting Bitcoin Cape Town. And Ricki is going to be joining me to chat a bit about this new regulation that's been proposed in South Africa. So, Ricki, let's get straight to it. What's the real threat here with these new capital flow management regulations?

**Ricki Allardice** (0:36)
Hey, Stephan. Good to see you, man. Yeah. So it's a regulation that's been proposed by the Treasury Slash Reserve Bank of South Africa. And essentially, what they've done is really abnormal. They've tried to push this thing through extremely quickly. And I think the high-level cliff notes for people to understand is that they are proposing new regulations on an existing act. So what they're doing is they're circumventing Parliament completely with this new regulation. And when you understand what they're trying to push, it's absolutely crazy that they're trying to do this without parliamentary oversight. So essentially, the law they are using is a law from 1933, which was written before South Africa was a independent republic. We were still a British colony at that time.
And so the law was written in 1933 and then it was amended in 1961 by the apartheid government. And now the new ANC government, which is, I say new, it's been in power for over 30 years, you know, post New South Africa, they are using a colonial law slash an apartheid era law to push through these regulations. So I mean, the irony shouldn't be lost in anyone that this is what the ANC is doing. But the regulations they're pushing is now amending, effectively, the old capital controls laws that South Africa has, which in itself is a major issue. But they are pushing through these regulations, which seek to criminalize self custody of Bitcoin and crypto assets. So what they're saying is that you have to leave your crypto assets, and this is the language they use, not my language, but you have to leave your crypto assets with a authorized crypto asset service provider, so regulated entities, in other words, an exchange.
And if you do not do that, then and you transact and they catch you, they can confiscate all of your crypto, you have to hand over your private keys. And this can be enforced by a whole host of different actors, not just the police. And all of this can be done without a warrant. So it's the police, it's the border control agents, it's an agent of the Reserve Bank, so Reserve Bank employees and agents of Treasury, Treasury employees, super wide.
And the biggest thing is there's this undisclosed threshold that they have not disclosed in the draft regulations they published. They just say some threshold, which is to be defined in the future, you are not allowed to transact over that amount. They have since walked it back slightly because of the massive public pressure they're faced, but nothing real has been published in gazette form yet. So we still don't really know what they're proposing here. But the biggest thing we do know is that they've left a bunch of placeholders for themselves, like the undisclosed threshold amounts. In other words, they could set the threshold amount to some arbitrary number, like 10,000 rand, which is like $500.
So you're allowed to do PDP for things under $500, but above that, you got to use a regulated custodian, which means you have to leave your crypto, your Bitcoin with the custodian. So we just don't know, but it's crazy that they can try to publish a regulation without a quantum defined. So anyway, what happened was, they published this regulation, they gave the public less than a month to comment on this, and this is the most important change to regulation in decades. They gave the public less than a month, there was big public pushback, they then reduced the time to 22 working days. And then on the day before that comment window was due to expire, they then increased it to the 30th of June. So we've got another six days.

**Stephan Livera** (4:09)
As we speak now, it's the 24th of June, so you've got what, six days or whatever to get a comment. So this is still in public consultation, right? Can you give us the, what's the normal process here? Is it public consultation and then the law changes or what?