I came across news of South Africa's new capital flow rules and got really pissed as it looked as if it was entirely aimed at those traveling to South Africa with crypto in their possession. I actually went through it twice again to verify if I was overreacting to the situation, but the more I read it, the more uncomfortable it made me feel. I'm all for regulation, when it comes to cross-border capital flows even since we know governments will always have an interest to monitor such activities. But this one that is being introduced didn't feel right in any form in my opinion.
With what it entails, it all feels as if a precedent is being set where your access to your holdings can be searched, seized, even when it has been legitimately acquired in the past because you are going to another country which supports this regime. You cannot treat someone the same way you would when trying to search an individual about carrying fiat currency which has always been the established way and so is its regulated system. Crypto on the other hand, is a decentralized means of transaction, which shouldn't have such controls to the extent of searching of a person's personal items and electronic devices when traveling.
The new regulation also implies that users traveling into and out of the country have to declare their crypto, their phones can be searched and even have their assets seized if found to not comply. I can't stress enough, I entirely disagree with that last part. We are talking about the digital assets that someone spent many years accumulating and holding it through the various bull and bear market phases, but now that it has grown to have significant value the last thing the holder would expect is that they can be subject to a search and seize operation because of their possession of digital assets.
I have no problem with tax being applied if need be, because if someone intends to transfer their crypto into real money they will invariably be using the banking system in which a proper tax structure would exist and a person should pay their due, but going beyond that level of jurisdiction and searching mobile phones, looking for hardware wallets and threatening to seize possessions just because you have crypto does seem to be crossing the line.
I also am convinced beyond any doubt that, however tight the rules are, they will always be found lacking because crypto users are more creative than governments will ever realize. Users can simply transfer assets before traveling to a trusted friend or move it to an offshore wallet for access when traveling to a restricted country. I have even read about a digital photo album that can help keep wallet seeds phrase and keys that can be very hard to detect or find out. So at the end of it all, such a policy may achieve nothing more than inconvenience people and nothing more.
This is not about trying to champion something illegal and irresponsible; it is purely about principle. It's about people being given a fair amount of freedom over what they acquire without them being deemed suspicious on default and being subjected to the controls that crypto, to a certain extent, set out to resolve in the first place. No, I do not agree with that motion at all; however the government tries to spin it, it is clearly the wrong way, particularly with regard to something that was established for personal empowerment and freedom not to control the lives of individuals.