MJ Givens, Analyst at Octa
The South African Revenue Service (SARS) is no longer issuing warnings. It is enforcing. With new registration demands and cross-border data access, SARS is cracking down on undeclared crypto holdings. Advisers are now in the hot seat, tasked with helping clients disclose everything before the window for voluntary compliance slams shut.
SARS steps up enforcement
In 2023, crypto assets were formally included under South Africa’s definition of a “financial product.” This meant all crypto trading platforms needed to register with the Financial Sector Conduct Authority (FSCA). By the end of 2024, over 240 crypto asset service providers (CASPs) had been licensed, providing SARS with a direct window into user transactions.
But now, in mid-2025, SARS has gone a step further. In April, SARS called on all exchanges, wallets, and other virtual asset service providers (VASPs) to register their businesses before embarking on an enforcement campaign. These disclosures enable the authority to cross-reference wallet activity against filed returns and auto-assessments. In other words, undeclared wallets or income are easier than ever for SARS to detect.
With over 5.8 million South Africans holding crypto assets (nearly 10% of the population), the compliance stakes are high. Furthermore, individuals must disclose all crypto holdings, not just income from sales or conversions. Wallet balances, airdrops, and even token swaps may trigger scrutiny.
What qualifies as taxable crypto activity?
Advisers also have a responsibility to demystify what SARS considers taxable crypto activity. In most cases, digital assets are treated similarly to other capital assets, meaning a wide range of transactions may carry tax implications.
These include selling crypto for traditional (fiat) currency, swapping one token for another, or using digital assets to pay for goods and services. Even less obvious activities, such as earning crypto through mining, staking rewards, or airdrops, can trigger a tax liability.
In this tightening environment, advisers must ensure clients understand that simply holding or moving crypto isn’t tax-neutral. Every transaction, no matter how small or unconventional, could fall within SARS’ audit scope. Even crypto held in overseas exchanges or self-custody wallets is subject to South African tax laws. There is no offshore exemption.
How advisers can help clients stay compliant
As enforcement escalates, advisers who fail to flag crypto liabilities may find themselves not only fielding client fallout but also navigating questions around professional negligence.
Advisers have a clear responsibility in this tightening environment. First, they should be urging clients to disclose all crypto holdings, regardless of whether any trades have occurred. SARS has made it clear that simply holding tokens, even in a dormant wallet, can trigger tax scrutiny.
Next, advisers can assist clients in reviewing prior tax returns to identify any omissions or inconsistencies. In many cases, a voluntary disclosure programme may still be the most effective way to resolve past non-compliance while limiting penalties. Failing to disclose crypto-related income or holdings may result in penalties of up to 200%, plus interest, making early disclosure far less costly than waiting for SARS to initiate an audit.
Finally, staying current with updates from the FSCA and SARS is critical. The list of licensed crypto asset service providers (CASPs) continues to evolve, and guidance from the regulator is becoming more granular. Advisers who keep pace with these developments are better equipped to protect clients and themselves from future audit risk.
The audit window is narrowing
Crypto regulation in South Africa is advancing quickly, but enforcement is moving faster. What started as a softly worded compliance suggestion is now backed by tech-driven audits, inter-agency data sharing, and a clear focus on undeclared assets.
For advisers, the window to act pre-emptively is closing. Whether clients are long-term holders or occasional traders, transparency now is better than an audit later.
In the age of algorithmic audits, advisers have two options: get ahead of SARS or get caught behind.
Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk, and we and Octa do not accept any liability for any resulting losses or consequences.