From CompliNEWS | Financial Service Intelligence Watch
Bitcoin and terror financing: Johannesburg man’s case highlights South Africa’s challenges
The arrest of Johannesburg resident Ziyadh Hoorzook on 3 January 2025 has reignited concerns over South Africa’s vulnerability to terrorism financing, reports Daily Maverick. Hoorzook, a 35-year-old accused of using Bitcoin to support terrorist activities, appeared before the Lichtenburg Magistrate’s Court on 10 January to apply for bail. He faces charges under the Protection of Constitutional Democracy Against Terrorist and Related Activities Act, following an investigation that began in 2018.
According to the Hawks and the Financial Intelligence Centre, Hoorzook allegedly purchased Bitcoin worth R11 500 through the virtual asset provider Luno in November 2017. The funds were reportedly transferred from his bank account to Luno’s custody wallet before being sent to another wallet linked to a purported charity. Investigations revealed that this charity was associated with organisations soliciting financial aid for weapons and other resources to support terrorist activities in another country. Hawks spokesperson Colonel Philani Nkwalase confirmed the transaction was a direct response to an appeal for funding such activities, raising alarms about the role of cryptocurrencies in bypassing traditional financial scrutiny.
Terror financing in South Africa is an escalating issue, with the 2024 National Risk Assessment identifying the country as a high-risk zone. Experts, including Willem Els from the Institute for Security Studies, have attributed this vulnerability to a historically cautious stance on terrorism. Els noted that South Africa’s post-apartheid sensitivities contributed to a reluctance to confront terrorism head-on, stemming partly from Nelson Mandela’s branding as a ‘terrorist’ during the apartheid era. This hesitancy persisted for decades, even as incidents such as the Pagad bombings of the 1990s and the Boeremag trial of the early 2000s forced the government to address terrorism intermittently.
South Africa’s greylisting by the Financial Action Task Force (FATF) in February 2023 further underscored its shortcomings in meeting international standards for combating money laundering and terrorism financing. This status has hindered the country’s financial reputation globally, with its removal from the grey list expected no earlier than October 2025.
While the arrest of Hoorzook marks progress, significant challenges remain. Over the past five years, there have been only two convictions under the Protection of Constitutional Democracy Against Terrorist and Related Activities Act, highlighting enforcement gaps. However, the Hawks have hinted at ongoing investigations that could result in additional arrests, signalling a shift toward greater accountability. Nkwalase emphasised the importance of collaboration with international partners and financial institutions in addressing terrorism financing, noting their crucial role in supporting law enforcement efforts.
Despite improvements in legislation, South Africa faces substantial capacity issues that hinder its ability to address terrorism financing comprehensively. Els acknowledged that while arrests like Hoorzook’s represent a step in the right direction, the country needs to prioritise building enforcement capabilities and maintaining vigilance. He warned that the tendency to de-prioritise terrorism during periods of apparent inactivity could leave South Africa vulnerable to future incidents.
The Hoorzook case underscores the complexities of regulating cryptocurrencies and preventing their misuse for illicit purposes. It also highlights the urgent need for South Africa to bolster its approach to terrorism financing, both to protect its financial systems and to restore its standing on the global stage. As authorities continue to investigate and strengthen enforcement, the hope is that such measures will pave the way for a more secure and resilient financial framework.