Between Blockchain and Black Markets: South Africa's Legal Readiness for Crypto-driven Cyberfraud

Authors

• Sagwadi Mabunda, University of the Western CapeFollow
• Yassin Chande, University of the Western CapeFollow

Abstract

This paper examines whether the proliferation of cryptocurrency-facilitated fraud warrants a reclassification of the terrestrial crime of fraud into the distinct statutory offence of cyberfraud under South African law. Engaging with established fraud typologies — exit scams, Initial Coin Offering (ICO) scams, Ponzi schemes, pump-and-dump schemes, and market manipulation — the article tests their definitional fit against both the common law of fraud and section 8 of the Cybercrimes Act 19 of 2020. Through a hypothetical composite scenario combining multiple fraud typologies, the article demonstrates that whilst cryptocurrency significantly amplifies the reach and complexity of fraudulent schemes, it functions primarily as an instrument of fraud rather than a constitutive element of cyberfraud as defined under South African law. The article further critically examines the regulatory response of the United States Securities and Exchange Commission (SEC) and derives lessons for South Africa's developing regulatory framework. It concludes with recommendations centered on consolidated cryptocurrency legislation, robust Know Your Customer (KYC) obligations, and a comprehensive public-awareness strategy.

Recommended Citation

Mabunda, Sagwadi and Chande, Yassin (2026) "Between Blockchain and Black Markets: South Africa's Legal Readiness for Crypto-driven Cyberfraud," Communications of the IIMA: Vol. 24: Iss. 1, Article 14.
DOI: https://doi.org/10.58729/1941-6687.1506
Available at: https://scholarworks.lib.csusb.edu/ciima/vol24/iss1/14