Finance Minister provides details about investigation into Mark Burke’s company’s R4 billion in foreign exchange transactions

Finance Minister Enoch Godongwana has provided details about an investigation into the company started by the DA’s Federal Finance Chairperson, Mark Burke.

The investigation focuses on Kastelo, a company that Burke founded in 2019 and served as chief executive until 2024.

Kastelo is a financial technology company which later launched a Bitcoin arbitrage trading service.

Crypto arbitrage is the practice of buying a cryptocurrency where it is cheaper and selling it where it is more expensive.

Bitcoin is typically more expensive in South Africa than when buying from offshore exchanges in US dollars, which creates an arbitrage gap that traders can exploit.

However, because the arbitrage margins are small, a company needs to buy a lot of bitcoin to sell in South Africa to make money.

This poses an exchange control problem, as the money must be moved out of South Africa to buy bitcoin on a cheaper international exchange.

To overcome this problem, Kastelo developed a system where it bought bitcoin on behalf of South Africans using their international allowances.

Burke argued that what they were doing was legitimate and that they did not break any laws. However, the South African Reserve Bank (SARB) disagreed.

Kastelo was accused of circumventing exchange controls by offering customers bonuses for using their annual foreign investment allowances to purchase Bitcoin.

It allegedly did this by lending customers money to consume more of their R11-million annual allowance, and pocketing most of the profits.

Kastelo’s bank accounts were frozen on 25 November 2025 on allegations that its crypto arbitrage trading service contravened South Africa’s Exchange Regulations.

Finance Minister Enoch Godongwana explains

National Assembly member asked Finance Minister Enoch Godongwana for details about the investigation into Kastelo.

Godongwana said that an affidavit by a SARB’s Financial Surveillance Department investigator identified reasonable suspicion of exchange‑control contraventions.

The investigation commenced in October 2025 and initially focused on transactions conducted between 4 August 2025 and 21 November 2025.

He added that foreign exchange transactions amounting to approximately R4 billion may have been conducted in contravention of the Exchange Control Regulations.

It is alleged that these funds were ultimately used to acquire crypto assets abroad, which were subsequently sold through local crypto asset service providers.

“Preliminary investigations indicate that the benefit of these transactions accrued to the entity,” Godongwana said.

“The ongoing investigation will determine the full extent of any contraventions that may have been committed and whether any further regulatory breaches occurred.”

The total monetary value of transactions involving clients’ Foreign Investment Allowances is suspected to amount to an estimated R3.496 billion.

The final value of any suspected contraventions is subject to the findings of the ongoing investigation.

The SARB has identified cases where it has been alleged that certain clients were not aware of the fact that foreign bank accounts were opened in their names.

“The question of whether clients, in fact, had knowledge of the opening of such accounts forms part of the ongoing investigation,” he said.

“The investigation remains ongoing, and its scope may be expanded should additional transactions outside this period be identified.”