BREAKING: Golix Challenges The Reserve Bank Ban Of Cryptocurrency At The High Court

High Court of Zimbabwe

No surprise really, I was expecting the Reserve Bank of Zimbabwe to be challenged in court for their directive that effectively banned cryptocurrency in Zimbabwe. The central bank did not just instruct banks to stop facilitating any cryptocurrency linked transactions but they also directed the general public to stay away from cryptos. Now, it has emerged they wrote Golix and possibly other cryptocurrency startups telling them to wind up. Golix has had some of its bank accounts closed.

Such pronouncements attract legal fights and we have one at our hands now. Golix’s challenge is on three arguments:

Does the RBZ have legal authority to ban cryptos?

The first argument that Golix is putting forward is to ask whether the central bank has authority to declare cryptos illegal. They build up their case by explaining how they have met the RBZ several times including one day before the RBZ released the ‘infamous’ circula and four days before the RBZ wrote Golix directly.

Golix argues that the Reserve Bank has no jurisdiction over Golix and that they have never acted as if they had in all their dealings.

The crux of their argument is perhaps summarised by this paragraph from their urgent chamber application before the High Court:

I submit that the ban in effect outlaws and classifies as illegal Applicant’s operations.
The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal.
That will amount to law making, a function that belongs to the legislature and not the
Respondents. Respondents are thus clandestinely usurping Parliament’s law making

Applicant refers to Golix and Respondent to the RBZ and Dr John Mangudya is the second respondent.

I don’t know about the legal authority of the RBZ and the court will make a ruling on that one. However, I question the moral authority of the central bank to act as they said as ‘custodians of public trust.’ The contrast is true: Golix rose and became a household name because it solved the problem of value exchange after the creation of the bond note and worse RTGS money by the Reserve Bank of Zimbabwe.

Ban is not fair according to the legal principle of administrative justice

The second argument by Golix is that the RBZ did not give reasonable notice and right of response when they issued their directives which they argue means a breach of Administrative Justice since the RBZ is founded by statute as an administrative body.

This block quote best summarises the argument:

Applicant was never advised prior to the ban that it will be implemented even though
Respondents had ample opportunity to advise Applicant of same. As aforesaid, the last
meeting between the parties was held on 11 May 2018. Four officials from the Applicant
including myself attended the meeting while fifteen officers, including the Registrar of
Banking Institutions represented the Respondents. In that meeting, the discussions were
more of Respondents wanting to learn and understand the technology behind our
business and our business model.

The impression we got was that Respondents wanted to understand in order to begin
working on regulation. No mention was made of any impending ban on our business.

The purpose of the ban was also not explained to us in advance. The letter sent to us
advising of the ban does not explain the purpose of the ban either. It only advises of the
ban. We can only speculate as to why we were banned.

In the absence of any warning about the ban, its purpose or the reasons behind it,
Applicant cannot regulate its conduct appropriately in order to comply with any
requirements. Applicant does not know what it needs to do in order for the ban to be
reversed. Applicant could also not regulate its affairs in advance in order to prevent the
ban by addressing the reasons for which it was being imposed.

The sudden and immediate nature of the ban is seriously and irreparably prejudicing
Applicant’s business for as long as the ban remains in place. Applicant was caught
unaware. With respect, the nature of the ban suggests malice and bad faith on
Respondents’ part. One is left with a feeling that Applicant was deliberately not advised
of the ban so as to maximise the damaging impact of the ban on Applicant.

Golix further argues:

I should point out that Respondents’ failure to advise of any right of appeal or review
also suggests strongly that Respondents do not yet have the power to regulate the
Applicant. I am advised that whenever an administrative authority makes a decision, it
is customary that the decision is accompanied by an indication of any right of appeal or
review against the decision. The absence of a clear right of recourse in this case clearly
shows that there is not yet a clear framework empowering Respondents to issue a ban
such as it issued.

The ban is unconstitutional

The third argument put forward by Golix is that the RBZ acted unconstitutionally. They site section 68 of the constitution:

Section 68 of the Constitution requires that administrative action be lawful, reasonable,
proportionate and procedurally fair. I humbly submit that Respondents’ actions fell
short of the standard required in the Constitution

The reasons they give for their position that section 68 of the constitution was violated by the central is summarised in this quote:

 I should explain why Applicant contends that the decision is disproportionate in the
circumstances. First, the press statement issued by 1st Respondent does not state the
purpose for which the ban was imposed. The reason why it was necessary to impose the
ban is not stated in the press statement. We can only speculate as to why the ban was

In the absence of a clear reason for the imposition of the ban, it is really difficult to assess
the proportionality of 1st Respondent’s decision vis-a –vis the goal it was intended to
achieve. Nonetheless, even in the absence of a clear reason for the ban, it is not difficult
to see that the decision is disproportionate.

The rest of the document supposes the possible fears that the RBZ may have had and responds to those fears as well as proposes what Golix obviously deems would have been a more reasonable response which of course includes the issuance of regulatory sandbox license as I have been advocating here.

Is this another Kwese drama in the making? As the professor would say: handei tione.



  1. Worried

    The first argument is irrelevant…rbz is regulatory authority the can close your bank account… Intercept funds… Even if they lose that one they can simply freeze your assets… So directly or indirectly they are the regulator… Techzim own admission that golix was legal way to convert your USD to bond at premium… Not even a business model.
    By the way is it not obvious they can’t force you to do one to one with the bond so that’s why they bannned you… Secondly they were not getting any money from you… As far as I can tell your profits were tax free… Till they come up with regulation you going to have to wait it out

    1. mpengo

      It’s good that you cite “bank account”.

      Let me condense it for you:

      Technically, banking and related regulation is where the RBZ stops. That is where it is empowered by the banking act, and several applicable acts of law, to regulate.

      Crypto currency is not defined by law, a law which the RBZ would be administratively allowed to act upon.

      As for tax, ZIMRA is clear about capital gains tax. There’s no escaping that one, and it is separate from the Banking act. It is not under the purview of the RBZ, sorry Mangudya.

    2. Tinashe Nyahasha

      I am not too sure about the Golix arguments. I expected a legal battle but not along these lines. Am no expert though

  2. Happy Go Lucky

    The Golix argument is long winded and unfocused, their legal argument is wrong in my opinion:

    The RBZ can prohibit all banks in Zimbabwe from transacting with Golix simply because Golix is not an “authorised deposit taking institution”, to be one, the law currently stipulates multiple licensing regimes that Golix does not meet. On that basis the RBZ is well within its rights to ban golix.

    RBZ can order Golix to shut down all its accounts on the basis that currently Golix is operating as an unauthorises deposit taking institution which is not licensed by the RBZ and has not met any statutory minimum capital requirements or standards, the onus is on Golix to be licensed and to be authorised, Golix is at risk of attracting huge fines by barking up this tree. “deposit taking institution” is a broad term which Golix falls under.

    An interesting argument by Golix is the fact that Golix, as a crypto exchange, does not fall under the jurisdiction of the RBZ and as such any attempt by the RBZ will constitute law making, this is not true in my opinion, by virtue of holding Fiat accounts on behalf of users and allowing that money to be withdrawn or exchanged Golix is in ADI territory. In any case if Golix insists on a law that specifically bans cryptos, considering this is likely a political decision to solve cash shortages, they will get just that in the form of an amendment bill that would explicitly ban their operations and render this whole issue done and dusted, not a good move, they need to leave this loophole intact as they have no obvious support in parliament and an amendment to ban crypto currencies will likely sail through unopposed.

    Golix must understand that the RBZ was being polite and playing to public sentiments , international community and academics when they went to lengths to justify their actions when it comes to crypto currencies. It will be ill advised for Golix to argue a press statement by RBZ, the idea is to argue the laws behind this decision, because it is those laws that RBZ will unleash on Golix in the coming days not the wording of their press conference.

    The RBZ has the right to ban any “un authorised” financial activities immediately, that is why forex dealers in town don’t get days to wind down or a right of appeal or review. RBZ can simply argue that Golix operated illegally and is not licensed therefore it should cease operations immediately, there is no requirement at law for due process there and in that sense the decision is directly proportionate if not lenient.


    Step 1)
    Golix can shut down all fiat transactions on their platform as directed by the RBZ (TO AVOID BREAKING THE LAW AND THUS FINES) and ensure that they close all bank accounts as directed, they can then payout all customers their money.

    Second: Golix can open foreign bank accounts and handle all payments using VISA ad Mastercard from RSA. At this point Golix is no longer a deposit taking institution operating in Zimbabwe, they are simply a technology company registered in Zimbabwe but operating internationaly like netflix or youtube. At this point they can successfully file an urgent application at the high court arguing the fact that the RBZ has no juristiction to ban their operations and has no right to shut down a PVT LTD company that has followed all relevant directives from the RBZ and has ceased to operate under its jurisdiction.


    Clear of interference from the RBZ, Golix can argue that they are being treated unfairly by the RBZ in keeping with the spirit of the law. Citing mobile money, Golix should make it clear that if RBZ can allow Ecocash, One Wallet, and Telecash to operate without interference from the RBZ then Golix should also enjoy the same right because Golix and Ecocash are fundamentally equal before the law and must be treated the same. If Golix is banned so should all mobile money companies as they are all unlicensed and exist in the same regulatory void as mobile money, this has nothing to do with crypto currencies. If the RBZ opts to regulate mobile money they should do the same for cryptos.

    Here is some context:

    1. Tinashe Nyahasha

      On this I don’t have much knowledge. Law is full of loopholes so I can only imagine that the Golix lawyers are working some angle that is perhaps not visible to the rest of us

  3. Nice

    So as explained above this is going to be thrown out with costs because rbz controls bank accounts that they need… Solution to will go against Forex ppl will stop using their service cause the premium is no longer in play plus visa and MasterCard have charges… Hence their business model is wrong they can only thrive in Zimbabwe and the real reason for their meteoric rise…ppl were not really interested in bitcoin just premiums and speculation… Blockchain on the hand is where the money is and they need to change their game

  4. Ben

    China try to ban cryptocurrencies but saw that it will not work and had to introduce a research unit under the country’s industrial ministry and officially launched its monthly ratings index.
    Do the guys at RBZ know what are cryptocurrencies in the fist place.
    Zimbabwe is open for business my foot

    1. Tinashe Nyahasha

      Yeah, I expected that kind of sandbox license not this rushed ban

  5. Ryan

    Unfortunately I don’t have the legal background to make an informed comment. I wish Golix well in their fight, and regard this move by the RBZ as short-sighted and repressive from a progressive, business point of view.

    All the other countries that have banned bitcoin – Bolivia, Cambodia, Iran, etc. – hardly big hitters on the international stage, all with repressive and backward governments, and we have opted to join them as we “open for business”. How can that possible be seen by anyone as a positive move?

    1. Tinashe Nyahasha

      That’s the question isn’t it?

  6. Anonymous

    Can we not petition the government to review this ban?

    1. Tinashe Nyahasha

      Not sure if there’s none already. It has to come from interested parties (not Techzim otherwise we become an activist). Hope someone launches one soon though…

      1. t

        Don’t worry. They will come around. Blockchain ain’t going anywhere

  7. wokenman

    I have no horse in this race. As a zimbo I wanna see money invested in companies that make things and give people jobs – not get hoarded by rich people to gamble in a markets that is not linked to any real economic activity. Zim needs CAPITAL – this thing eats capital. Hides it away where computers arbitrarily decides what it’s worth from one day to the next – I’m sorry but we don’t NEED this – so we don’t have to mourn like it was not gonna be some kind of economic savior for Zim, let’s be real. What Zim needs now is absolute stability and predictability and ready capital for real tangible investment. One can argue that yaaah a guy who puts money in crypto can make more and then invest that but really all they do is hoard. They just sit on it and watch it go up and down, just like an indian with bricks of currency in his spare bedroom. So as a lover of tech I’m fascinated by the whole crypto thing – but I’m not about to cry for it like we lost something. Saka ngavapedzerane. When they started doing it I was like “well done” etc but now they are shut down, I can’t really say I think it’s gonna “damage” the economy in any meaningful way.

    1. Tinashe Nyahasha

      I hear you there. Am disappointed by the attitude to ban without learning, to me that’s bad precedence and a lost opportunity. What’s next? IoT, AI?

    2. Randazha

      THIS. A thousand times this. ☝️

    3. Anonymous

      “Zim needs CAPITAL”, “absolute stability and predictability and ready capital for real tangible investment.”. We have been saying this since the 90’s and how long shall we keep saying this? I am tired of people like you telling us what we need, everyone knows what we need, even a grade 3 student will tell you the same thing.
      What I like about Golix is that they are doing something with a mantra of giving financial autonomy to all people in africa.

  8. Tirarira

    RBZ is an evil Spirit.They don’t want to see citizens prosper and be connected to global civilization..Golix should just register a new company and say we sell Sweets biscuits and sell their products with Digital tokens..They should say they help people to manage their digital assets or digital contents. Golix has not yet created its own currency..The cavemen at RBZ is thinking Golix have a currency..
    This is an oppprtunity for citizens in Zimbabwe to decide whether they want to be limited in their access to open digital assets. Good luck Golix..Continue to innovate..move to Lusaka , Nairobi, Dar Es Salaam, Musina.Joburg, Mauritius and focus on Zim transactions..Its a question of time the cavemen at RBZ will be gone..I think Golix should continue on the crypto space now commit more. Setup 3 teams one to fight in the courts 2. Engage alternative political leadership than current cavemen 3.Look at other friendly neighbour to operate freely from..Lusaka ..Zimbabweans can come with other ways
    .Do not be discouraged Don’t Stop..RBZ does not have its own currency. Country has no cash

  9. Thomas Sibanda

    The application is misdirected. The RBZ has powers in terms of the National Payment System Act to sanction any activities that may harm the national payment system. See section 10. The RBZ is saying to banks : Bitcoin is anonymous, volatile & unregulated. We dont want you to facilitate such activities through our National Payment System until we have proper systems for virtual currencies. That is perfectly lawful. Bitcoin is neither legal tender or currency in Zimbabwe.

  10. Randazha

    FlipKart, who just signed off a $16 billion acquisition deal to Walmart had to work with some tight regulations as well. Might find it an interesting read. Seems the developing world doesn’t take lightly to innovation.

  11. t

    Don’t worry. They (RBZ) will come around. Blockchain ain’t going anywhere. They are banning it now coz it is impinging on their looting. Golix –just move your business to SA for the time being. Soon you will hear them saying they are creating their own COIN kkkkkkk. Watch Venezuela!!!

  12. $$$

    Golix can’t move out of zim cause then they won’t be a premium and none will use their service… The price in Zambia or south will be the same as other exchanges… That’s why they are fighting in the first place otherwise they would have set up shop elsewhere long ago

  13. ah shame guys, tsk tsk !!

    and yet again now: Here it is again, from a proper investor, with REAL investments: Warren Buffett on cryptocurrencies: “When you buy something because you’re hoping tomorrow morning you’re going to wake up and the price will be higher, you need more people coming into it than are leaving. And you can get that and it will feed on itself for a while, and sometimes for a long while, and sometimes to extraordinary numbers, but they come to bad endings, and cryptocurrencies will come to bad endings. And along with the fact that there’s nothing being produced in the way of value from the asset, you also have the problem that it draws in a lot of charlatans and that sort of thing, who are trying to create various sorts of exchanges or whatever it may be. It’s something where people who are of less-than-stellar character see an opportunity to clip people who were trying to get rich because their neighbor’s getting rich buying this stuff neither one of them understands. It will come to a bad ending”

  14. Samuel Masuka

    my understanding is that at this point, cryptos are more of a commodity than a currency, and RBZ feels it’s a currency that they should regulate, which really isn’t the case.

  15. Fusion

    They blocking a loop hole for trading in USD to bond… That’s what they really interested in… And it’s exactly what golix has been doing and making money off… Under all the hullabaloo they basically black market traders…I mean really how have they brought to the economy besides just skimming of the top of trades in a country that’s tuning to get rid of RTGS… Literally black market traders and they know it… Their business cannot work outside zim… Nothing to do with bitcoin or Blockchain

  16. Ra’s al Ghul

    Some of the comments here just highlight the level of ignorance and reason why we have problems in Zimbabwe. The so called premiums that are referred to by some people here are absolutely nothing when it comes to trading profitability of Golix or any exchange. The USD/BOND/RTGS rate is not a machination of Golix and does not benefit them. The true beneficiary of these rates is actually RBZ. It hurts everyone else, Golix included.
    Golix can pretty much just pack up and go to any other country – they actually were in the process of doing that anyway, well before the ban.
    I honestly care less about the ban, I’m just worried more by the level of ignorance that is displayed by some people here who are vehemently supporting the ban based on their piss poor understanding of cryptos and the Golix business model.
    It’s so sad how people are very vocal against cryptos and yet silent about the real devil in our financial system.

  17. suckers !!

    Some of the comments here just highlight….. how many dumb@ss suckers “invested” in craptocurrency with golicks !!

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