Financial technology company Kastelo, which has been at the center of an investigation by the South African Reserve Bank regarding currency control and involves DA MP Mark Berk, has rejected the central bank's main accusation. The accusation was that the company's clients did not know about the transfer of billions of rand to foreign accounts in their name.
The company informed TechCentral that every client viewed a mandatory video and signed a discretionary mandate before making their first transaction. These statements were made in response to questions after the investigation was first reported by Business Day.
Kastelo, fintech company
In its statement, Central Bank financial investigator Andre Malherbe claimed that Kastelo systematically circumvented currency control by using third-party quotas for its own benefit. Furthermore, he indicated that clients were incentivized with bonuses to allow the use of their quotas, and that most of them were unaware that foreign accounts had been opened in their names.
The bank placed a portfolio of Kastelo worth 891 million rand in unified discretionary quotas and 8.9 billion rand in foreign investment quotas, noting reasonable suspicion of currency control violations amounting to approximately 4 billion rand between November 2021 and November 2025. Last November, the Bank blocked some of Kastelo's funds held at Access Bank. Kastelo informed TechCentral that about 13 million rand of client money remains frozen.
As an authorized financial services provider, Kastelo explained that its arbitrage service allowed clients to use their own quotas to profit from the difference between local and offshore cryptocurrency prices. Client funds in rand were used to purchase foreign currency through an authorized dealer, then sent abroad for cheaper cryptocurrency purchases, after which they were returned and sold at a higher price in the local market.
The company stated: "This was done on behalf of our clients, under their mandate, in their interests, with the necessary permissions of our authorized dealer and Sars." It also refuted the claim about bonuses, stating: "We disagree with the assertion that clients were paid bonuses for allowing the use of their quotas."
Daily Maverick reported that the bonus amounts ranged from 2,000 to 10,000 rand, and that Kastelo provided loans to clients to utilize most of their quotas. Investigators found that many of these clients were low-income workers who could not realistically afford such loans.
The company agreed that every potential client was required to watch an explanatory video titled 'how hard limit' before registration, which detailed the opening of a foreign trading account and Kastelo's mandate for actions thereon.
Legal dispute
The company clarified that before a client could confirm their consent with a digital signature, they were again informed via text and a checkbox that Kastelo would open the necessary accounts and trade on their behalf. The company noted that only a 'small number of clients' who had an active transaction at the time of the account freeze were affected by this.
Kastelo told TechCentral that the appellate court's decision in January concerned only urgency, while the substantive hearing on June 9 focused narrowly on whether the Central Bank followed due procedure, adding that the court made no findings regarding the business model or any alleged violations.
However, on July 28, according to reports of the ruling, the presiding judge Sharon Johnson dismissed the application to overturn the freezing order with punitive costs, ruling that the Central Bank established a valid and objectively reasonable suspicion of currency control violations. This does not determine the legality of the arbitrage model, which is a matter for a broader Central Bank investigation, but this is why the account, as Kastelo claimed, 'remains frozen.'
Kastelo was founded by DA federal wing chairman Mark Berk and is managed by his brother Nicholas. In a statement, Berk attempted to distance himself, stating that he 'left Kastelo in 2024 to pursue a political career' and 'ceased to hold office' as chairman of the wider group in February 2026. Nevertheless, he is still listed as 'founder and chairman' on Kastelo's official website.
Berk, who holds a PhD in econometrics from Cambridge and was elected to a financial position in the DA in April, replacing Dion George, stated that he 'always acted ethically and legally' and refrained from all parliamentary issues related to the Central Bank to avoid conflicts of interest. He emphasized: 'No allegations of wrongdoing or abuse have been made against me personally.'
DA leader Geordie Hill-Lewis supported him, while the ANC faction demanded his removal from parliamentary finance committees pending a decision.
According to currency control regulations, the foreign investment quota allows adult taxpayers to transfer up to 10 million rand abroad per year, in addition to a single discretionary quota of 2 million rand, which increased from 1 million this year. The Central Bank's testimony asserts that currency control exists to protect the country's foreign reserves, and that the Kastelo model depletes them regardless of any inflow, posing a risk to South Africa's external position.
This case occurs amid regulators' efforts to tighten their stance on cryptocurrencies and cross-border flows. The Central Bank noted cryptocurrency as a potential risk to financial stability, and the National Treasury proposed rules that could lead to a ban on cross-border cryptocurrencies, which was met with opposition from VALR and others, leaving the legislation uncertain due to conflicting court rulings.