How to Sell Crypto in South Africa in 2021

Why do we buy cryptocurrency? Why, to sell it, of course!

No matter what the HODL enthusiasts will tell you, the end goal of owning crypto is typically to cash out or spend your cryptocurrency at a profit. To do that without incurring losses through fees or taxes, it’s important to do your research on how to sell first.

Luckily, we’ve done all that for you!

How to Sell Crypto in South Africa

Here are some factors you should consider before selling Bitcoin: transaction fees and the withdrawal process, the amount you’re looking to withdraw, where your money will be sent to, and local laws on the fiat currency.

This guide will walk you through how to sell your cryptos for rand at the best price and show you the best exchanges to sell your crypto in South Africa.

Is it Legal to Buy and Sell Crypto in South Africa?

Currently, it is legal to buy and sell crypto in South Africa. A while ago, South African Reserve Bank (SARB) warned crypto holders and traders about the risks associated with trading the crypto market. The bank added that crypto comes with inherent risks for the user.

Additionally, virtual currencies are not classified as securities in terms of the Financial Markets Act, 2012 (Act no.19 of 2012). They are not subject to the regulatory standards that apply to the trading of securities.

According to the South African Reserve Bank Act, 1989 (Act no. 90 of 1989), the SARB governs the management of currency and has the sole right to issue coins and notes. But it hasn’t certified Bitcoin and other digital currencies as legal tender.

Therefore, payments made via Bitcoin in South Africa may not discharge a debtor of a monetary obligation and purchasers run the risk that their crypto payments will be unrecognized by South African law. Merchants are also legally entitled to refuse to accept Bitcoin and other virtual currencies as legal payment.

Where to Spend Crypto in South Africa

If you’ve just bought some crypto and you’re looking for where to spend some of it in South Africa, we’ve created a list of merchants who accept Bitcoin and other cryptocurrencies in South Africa.

Baseline Skate Shop

You can buy several branded skateboards, sneakers, hoodies, of your choice from this Cape Town-based skateboarding and streetwear store using some crypto from your digital wallet.

Future Light

Future Light allows you to purchase LED lights for anything from camping to households and parties from this store using some of your cryptos.

House of Sacks

If you’re a fashion geek in SA, you can buy eco-friendly hessian bags, hoodies, sweaters and other fashion items from House of Sacks using over 110 different coins, from their paygate; MyCryptoCheckout.

Takealot

Takealot is one of SA’s biggest retailers and it accepts Bitcoin. This makes it easy to go on a shopping spree comfortably with your crypto. They’ve successfully positioned themselves as the Amazon of South Africa to make it easy to buy almost anything online.

Anywhere Else You Want!

Apart from spending your crypto on online stores, you can also spend your crypto as a normal debit card on physical stores anywhere in South Africa by using a CryptoWallet debit card.

While cryptocurrency has not been widely adopted as a cash alternative in retail stores, as a South African crypto owner, you can still buy your products with any of the popular virtual currencies via your crypto debit card. It’s easy to use and highly secure.

You can swipe your crypto debit card at a store’s point of sale, where the required amount of Bitcoin, Ethereum, or other cryptocurrency is converted into rand and accepted by the seller. And also convert your crypto to fiat easily using the instant in-app exchange feature on CryptoWallet.

What Regulations Must be Considered While Selling Crypto in South Africa?

The cryptocurrency market moves so fast that regulators and tax authorities have not been able to come up with a clear regulatory framework. This has left many South African investors clueless on what to do for their year-end tax returns. Having an idea of when taxable events occur will help South African crypto investors to make informed decisions and avoid breaching local laws. 

The regulation that has been widely considered is that if you are deemed to be among South African residents for tax purposes, you are going to be taxed on your worldwide income, and that includes cryptocurrency gains and income paid in the form of cryptocurrencies.

Merely holding crypto in a wallet at year-end is not a taxable event, however, it’s a taxable event when you sell your crypto investments and realize a capital gain or loss. A capital gain or potential profit is only realized from a tax perspective when the asset is sold.

You should understand the difference between the tax for a short-term gain and long-term gain. In a short-term gain, the actual asset is held for less than a year, it’s deemed as income tax and taxed at a higher marginal tax rate (on a sliding scale up to a maximum of 45%).

In a long-term gain, the sale will be taxed at a more favorable rate. If you buy and hold crypto for a long period and then sell at a profit, capital gains tax (CGT) will apply. Your capital gains get added to your annual pre-tax income. The CGT rate can range from 7.2% to 18% depending on the tax bracket you’re in.

The Best Exchanges to Sell Crypto in South Africa

There are several crypto exchanges in South Africa where you can sell Bitcoin and other cryptocurrencies. However, you must go for a reliable and trusted trading exchange that also allows you to sell crypto at the best transaction fees.

We’ve compiled a list of the best exchanges to sell your crypto in South Africa. 

2 Changelly

Changelly exchange offers the best real-time prices for each trading pair on its site. It also offers an easy to use platform and fast transaction duration.

  • Rating: 5 star
  • Fees: Average fees
  • Limits: Limits: There are no trading limits on crypto but fiat transactions have buying limits – a $100 limit for the first transaction

3 Paxful

Paxful is a peer-to-peer crypto trading platform that offers over 350 different cryptocurrencies to its global users. It was founded in 2015 with its offices located in Estonia, USA, Hong Kong, and Phillipines.

  • Rating: 5 star
  • Fees: Low trading fees
  • Limits: Users who only verified their email and phone have a $1000 trade volume and wallet activity limit. To increase the limit, you’ll have to complete more verifications.

4 Bitfinex

Bitfinex provides order books with high liquidity, which enables traders to easily exchange Bitcoin, Ethereum, EOS, Litecoin, Ripple, NEO, and many other digital assets with low slippage.

  • Rating: 5 star
  • Fees: Low trading fees
  • Limits: Minimum deposit fee of $100

5 Bitstamp

Bitstamp is one of the world’s most famous crypto exchanges serving users since 2011. Traders can buy cryptocurrencies using regular method of payment like debit/credit card payments or bank transfer.

  • Rating: 4 star
  • Fees: High fees
  • Limits: Daily limits: 2500 USD/EUR/GBP, Monthly: 20000 USD/EUR/GBP. Minimum deposit: 50 USD/EUR/GBP.

6 BitMEX

BitMEX is a derivatives trading exchange that offers fast and secure trading to users. It is one of the safest exchanges for margin trading cryptocurrencies. BitMEX does not support fiat withdrawals.

  • Rating: 4 star
  • Fees: Average fees
  • Limits: No limits

7 OKCoin

Okcoin is a safe cryptocurrency exchange that makes it easy to buy Bitcoin and Ethereum, Dogecoin, and other cryptos using your card details or banking details. It has a reward program to earn that lets you earn up to 12% on your crypto.

  • Rating: 4 star
  • Fees: Average trading fees and lower fees for regular traders
  • Limits: Deposit and withdrawal limits are determined by account type & verification process completed

8 Kraken

Kraken is a trusted digital platform for trading a wide range of cryptocurrencies. It offers easy payment options for users at a great price.

  • Rating: 4 star
  • Fees: Average fees
  • Limits: No withdrawal limits after KYC.

9 LocalBitcoins

LocalBitcoins is a decentralized Bitcoin trading exchange that facilitates (peer-to-peer) Bitcoin trades. Users engage in the selling of bitcoin by posting buy/sell ads on the website.

  • Rating: 4 star
  • Fees: Competitive fees depending on individual trade agreements (peer-to-peer trading).
  • Limits: No daily deposit or withdrawal limits

10 Coinmama

Coinmama is a popular cryptocurrency exchange that allows you to buy and sell bitcoin and other cryptocurrencies with convenient payment methods like credit card and bank transfers.

  • Rating: 3 star
  • Fees: High fees
  • Limits: Minimum deposit fee is $100 and buy limit depends on verification level

11 eToro

eToro is an easy-to-use social rading platform where traders can copy the trades of investors across over 2300 financial instruments like exchange-traded securities, forex, CFDs, and popular cryptocurrencies.

  • Rating: 3 star
  • Fees: Low trading fees, high non-trading fees
  • Limits: Minimum deposit of $200

FAQ

How do I sell my cryptocurrency for cash?

You can sell 5 major cryptocurrencies for cash directly in South Africa on CryptoWallet. You will need to load crypto in your wallet to begin this process.

To Sell your Cryptocurrency follow these steps:

  1. Open the CryptoWallet app and go to the exchange section.
  2. Select the crypto you want to sell and choose the fiat currency you want to sell it for.
  3. Select the amount of you want to sell and you’ll see the exchange rate displayed on the screen
  4. When you’re satisfied with the details, “select confirmation”. Your funds will arrive in your wallet.

Do I need a license to sell cryptocurrency?

No. You don’t need a license for buying and selling cryptocurrency. All you need to do is sign up at an exchange and verify your identity if you want to buy or sell in large amounts or buy/sell using fiat currencies.

If you want to start a crypto trading exchange business, a place where other people can trade crypto assets, then you need to get some licenses. Check your local regulations or seek legal advice on what’s applicable to you.

Is crypto legal in South Africa?

Yes, it is legal to buy and sell crypto in South Africa. Although the South African Reserve Bank (SARS) has issued warnings concerning the risks associated with trading cryptocurrencies, there is no actual ban on any form of cryptocurrency trading.

How much does it cost to convert crypto to cash?

Most crypto-to-bank-account withdrawal methods include exchange fees.Coinbase Wallet currently charges a flat fee of 0.50% on all conversions.

How are crypto coins used?

Just like dollars, gold or diamonds, crypto coins are just another tradeable commodity. You can use it to buy daily life goods/ services, trade or invest it for profits and accept it as a payment method. Many people who use cryptos prefer them to traditional currencies and refer to crypto as the future of money because they are not controlled or regulated by governments or banks, and the transactions are anonymous.