The cycle is usually completed within 24 hours. Whilst trades are completed and profits are locked in within minutes of the deal being booked, banking systems can cause delays in settlements, resulting in funds only being withdrawn to clients accounts the following day. Should a trade be booked after 11am on a Friday, settlement will only happen the following Monday.

A Minimum amount needed for arbitrage is R200 000.

All profits are deemed to be due to trading activity (and not Capital Gains Tax) for taxation purposes. You are liable for taxes based on profits from trades.

Dos Hombres provides full reporting to clients for tax purposes. These report can be requested at any time at accounts@doshombres.io

All funds are kept in the client’s accounts for most of the process. You will never give us any usernames or passwords to your accounts.

Once funds land in Circle, the funds, although completely segregated for each client, is under Dos Hombres’ master account.

Dos Hombres acts as an agent to perform the steps in the arbitrage process outlined above. These steps are known and of a repetitive nature. Due to the software being an agent as well as Bitcoin not yet being a financial product, the process is not considered a financial service. As such, if any disputes arise, such disputes would need to be settled via civil law means as no ombudsman is available to you. Once Bitcoin is considered a financial product, the ombudsman will be available to you as per a complaints procedure guidelines which will be made available to you at such time as the activities are governed by FAIS.

NOTE: the reserve bank rules for foreign investment allowance differs with regards to arbitrage trading crypto currency. If any items, such as the source of funds used to arbitrage trade is in contravention, it is a serious offense and an illegal activity. Below is the reserve bank’s response to –
Are there any compliance requirements or exchange controls applicable to crypto assets?

The South African Reserve Bank (SARB) does not oversee, supervise or regulate crypto assets (CAs) (previously referred to as Virtual Currencies (VCs)) currently, but is continuing its effort to monitor this area as it evolves. SARB’s position on CAs as set out in the ‘Position Paper on Virtual Currencies, 2014’ remains current and relevant. A copy of the position paper is available on the SARB’s website, www.resbank.co.za, by following the links: Regulation and Supervision > National Payment System (NPS) > NPS Legislation > Position papers > Position Paper 02 of 2014, Position Paper on Virtual Currencies.

To reiterate the SARB’s position, CAs are not legal tender in the Republic of South Africa (RSA) and any merchant or beneficiary may refuse CAs as a means of payment. CAs are not guaranteed/backed by SARB as it operates independently from the central bank and the users thereof are alerted to the potential risk of fluctuation in its value. There are currently no dedicated laws or regulations that specifically govern the use of CAs in RSA and therefore, no regulatory compliance requirements exist for local trading of CAs in RSA. Legal protection or recourse to users, traders or intermediaries of CAs is therefore dependent on general common law principles. Dealing in CAs is performed at the end-users sole and independent risk. Related to CAs, are the use of Initial Coin Offerings (ICOs), and similar to CAs, the SARB does not regulate or supervise the usage thereof.

Neither the Currency and Exchanges Manual for Authorised Dealers nor the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority (manuals) allow for cross-border/foreign exchange transfers for the explicit purpose of purchasing CAs. These documents can be obtained from the SARB’s website, www.resbank.co.za, by following the links: Regulation and Supervision > Financial surveillance and exchange controls > Currency and Exchanges documents. The Financial Surveillance Department is, furthermore, from an exchange control point of view, unable to approve any transactions of this nature.

Individuals may purchase CAs from abroad through utilisation of his/her single discretionary allowance (SDA) (R1 million) and/or individual foreign capital allowance (FCA) (R10 million with a Tax Clearance Certificate), per calendar year, as outlined in the above-mentioned manuals, which a local Authorised Dealer in foreign exchange (AD) (local commercial bank) will be able to assist individuals with.

It should be noted that, when purchasing foreign exchange through an AD, a customer is required to sign a declaration, either physically or electronically, which includes the wording “I have been informed of the limit applicable to the above transaction and confirm that this limit will not be exceeded as a result of the conclusion of this transaction”. It follows that an individual is responsible for ensuring that he/she does not exceed the relative allowance applicable to the transaction i.e. R1 million or R10 million.

Furthermore, the use of another individual’s SDA or FIA, whether through the granting of a ‘loan’ to such an individual or any other similar agreement, is regarded as a simulated transaction for the purpose of circumventing the provisions of the Exchange Control Regulations and therefore an illegal activity. In this regard, we refer you to Exchange Control Regulation 10(1)(c), read with Exchange Control Regulation 22.

Exchange Control Regulation 10(1)(c) prohibits the entering into a transaction whereby capital or the right to capital is, without the permission granted by the Treasury, directly or indirectly exported from the RSA. Therefore, if an individual purchases CAs in RSA, which is used to externalise ‘any right to capital’, such an individual will be in contravention of the Exchange Control Regulations. A contravention of Exchange Control Regulation 10(1)(c) is, in terms of Exchange Control Regulation 22, a criminal offense.

It should also be pointed out that the repatriation to the RSA of value through CAs is not acknowledged as a repatriation of an individual’s SDA and/or individual FCA, due to the nature of CAs and the fact that such transaction is currently not reportable on the FinSurv Reporting system.

Similarly, non-residents who have introduced CAs to RSA for sale locally and who want to transfer the sale proceeds abroad will be unable to do so. The applicable exchange control policy is outlined in section G.(C)(i) of the Currency and Exchanges Manual for Authorised Dealers.