South African retail bank Capitec restricts customers from sending funds to crypto exchanges in a move highlighted as an anti-fraud measure.
Speaking to MyBroadband, the bank, through a spokesperson, said, “Capitec is committed to protecting our clients from fraud, which is why we made the decision to block EFTs and immediate real-time clearing payments to crypto exchanges on our app and business web interface.”
Additionally, Farzam Ehsani, the co-founder and CEO of VALR, said that Capitec Bank informed them that it had decided to restrict its customers from sending funds to crypto exchanges.
However, the CEO clarified that the move is unique to Capitec and that all other South African banks allow funding of crypto asset accounts.
The CEO also outlined that Capitec customers trying to fund their VALR account can use a South African credit card or an account from another bank.
Moreover, in April 2024, VALR received Category I and II approval from the South African Financial Services Conduct Authority to provide exchange services to its customers, allowing VALR to explore additional product categories.
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Carel de Villiers, Shiftly’s co-founder and CEO, also raised the issue on X, stating that he couldn’t fund his VALR account, a cryptocurrency exchange platform.
Villiers questions Capitec decision
Villiers questioned Capitec’s move to dictate how customers are allowed to spend their money, showing an error message during the transaction process that told him, “Payments to this beneficiary are not allowed.”
He, however, confirmed that it works on the web but is blocked on mobile.
Meanwhile, the South African Revenue Service has announced that crypto assets will be included in its compliance programmes and has told taxpayers to disclose information about their cryptocurrency transactions and investments.
The bank also stated that, given the growing interest in cryptocurrencies, users should use Capitec Pay as a secure alternative for transactions, and that it is collaborating with crypto exchanges that have not yet integrated Capitec Pay to expedite this process.
Moreover, Capitec has announced that the Capitec App now interacts with its Fraud Centre in real time, allowing the platform to warn or block payments if beneficiaries report or confirm fraud against them.
“This means that a brand-new account, created at any bank just a few hours ago, with confirmed fraud against it, will be blocked for all Capitec clients,” Capitec explained.
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