journal article·2026-01-13Open access

Blockchain Forensics and Regulatory Technology for Crypto Tax Compliance: A State-of-the-Art Review and Emerging Directions in the South African Context

Pardon Takalani Ramazhamba, Hein Venter

Applied Sciences· Volume 16· Issue 2

Abstract

The rise in Blockchain-based digital assets has transformed the financial ecosystems, which has also created complex governance and taxation challenges. The pseudonymous and cross-border nature of crypto transactions undermines traditional tax enforcement, leaving regulators such as the South African Revenue Service (SARS) reliant on voluntary disclosures with limited verification mechanisms, while existing Blockchain forensic tools and regulatory technologies (RegTechs) have advanced in anti-money laundering and institutional compliance, their integration into issues related to taxpayer compliance and locally adapted solutions remains underdeveloped. Therefore, this study conducts a state-of-the-art review of Blockchain forensics, RegTech innovations, and crypto tax frameworks to identify gaps in the crypto tax compliance space. Then, this study builds on these insights and proposes a conceptual model that integrates digital forensics, cost basis automation aligned with SARS rules, wallet interaction mapping, and non-fungible tokens (NFTs) as verifiable audit anchors. The contributions of this study are threefold: theoretically, which reconceptualise the adoption of Blockchain forensics as a proactive compliance mechanism; practically, it conceptualises a locally adapted proof-of-concept for diverse transaction types, including DeFi and NFTs; and lastly, innovatively, which introduces NFTs to enhance auditability, trust, and transparency in digital tax compliance.
Source: crossref · Quality: baseline

Research context

OpenAlex topics: Blockchain Technology Applications and Security · Cybercrime and Law Enforcement Studies · Crime, Illicit Activities, and Governance

SciVX discovery tags are terminology-based. OpenAlex topics are source-provided classifications.

Affiliations

Emerging Digital Technologies for 4IR (EDT4IR) Research Centre, Council for Scientific and Industrial Research (CSIR), Pretoria 0001, South Africa

Department of Computer Science, University of Pretoria, Pretoria 0028, South Africa

References (40)

Show source-provided references
1. Nakamoto, S. (2025, March 15). Bitcoin: A Peer-to-Peer Electronic Cash System. Available online: https://bitcoin.org/bitcoin.pdf.
2. Some simple economics of the blockchain10.1145/3359552 ↗
3. Swan, M. (2015). Blockchain: Blueprint for a New Economy, O’Reilly Media, Inc.
4. Sex, drugs, and bitcoin: How much illegal activity is financed through cryptocurrencies?10.1093/rfs/hhz015 ↗
5. (2025, June 20). Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues. Available online: https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-policy/flyer-taxing-virtual-currencies-an-overview-of-tax-treatments-and-emerging-tax-policy-issues.pdf.
6. (2025, June 20). 12-Month Review of the Revised FATF Standards on Virtual Assets and Virtual Asset Service Providers. Available online: https://www.fatf-gafi.org/en/publications/Fatfrecommendations/12-month-review-virtual-assets-vasps.html.
7. Decentralized finance
8. (2025, June 26). Cryptocurrency Penetrates Key Markets in Sub-Saharan Africa as an Inflation Mitigation and Trading Vehicle. Available online: https://www.chainalysis.com/blog/africa-cryptocurrency-adoption/.
9. An analysis of South Africa’s guidance on the income tax consequences of crypto assets10.4102/sajems.v26i1.4832 ↗
10. (2025, July 25). Jurisdictions Under Increased Monitoring—13 June 2025. Available online: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/increased-monitoring-june-2025.html.
11. Ramazhamba, P.T., and Venter, H.S. (2024, January 2). Conceptual Model for Taxation and Regulatory Governance among South African Crypto Asset Holders. Proceedings of the ISSA Conference, Gqeberha, South Africa.10.1007/978-3-032-09660-9_11 ↗
12. (2025, April 25). Exchange Control Circular No 2/2025 Statement on Exchange Control. Available online: https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2025/2-2025.pdf.
13. (2025, April 25). Media Release: SARS Warns About Crypto Asset Compliance, Available online: https://www.sars.gov.za/latest-news/media-release-sars-warns-about-crypto-asset-compliance/.
14. Using distributed ledger technology for digital forensic investigation purposes on tendering projects
15. Taxation of Virtual/Crypto Assets/Currencies10.17233/sosyoekonomi.2022.02.03 ↗
16. (2025, April 25). Crypto Taxes: Expert USA Guide 2025. Available online: https://koinly.io/guides/crypto-taxes/.
17. Lazea, G., Balea-Stanciu, M., Bunget, O., Sumănaru, A., and Coraș, A. (2025). Cryptocurrency Taxation: A Bibliometric Analysis and Emerging Trends. Int. J. Financ. Stud., 13.10.3390/ijfs13010037 ↗
18. (2025, March 14). Consultation Paper on Policy Proposals for Crypto Assets. Available online: https://www.ifwg.co.za/IFWG%20Documents/IFWG_CAR_WG-Position_Paper_on_Crypto_Assets.pdf#search=consultation%20paper%20on%20crypto%20assets.
19. (2025, April 25). Crypto Assets & Tax, Available online: https://www.sars.gov.za/individuals/crypto-assets-tax/.
20. The legal nature of cryptocurrency as property: Accounting and taxation implications10.1016/j.clsr.2023.105860 ↗
21. (2025, July 28). WTS Global Financial Services Newsletter #2/2025 Is Now Available. Available online: https://wts.com/global/publishing-article/20240117-financial-services-newsletter-2-2024~publishing-article.
22. (2025, July 28). Nigeria Crypto Tax Advice. Available online: https://taxnatives.com/jurisdiction/nigeria/crypto-tax-advice/.
23. (2025, July 29). Taxation on Cryptocurrency: Guide to Crypto Taxes in India 2025. Available online: https://cleartax.in/s/cryptocurrency-taxation-guide.
24. (2025, June 28). Cryptocurrency Tax Guides. Available online: https://koinly.io/blog/tags/guides/.
25. (2025, June 28). Crypto Tax Guides. Available online: https://coinledger.io/guides.
26. (2025, June 30). Tax Guides. Available online: https://kryptos.io/guides.
27. Fintech forensics: Criminal investigation and digital evidence in financial technologies
28. Meiklejohn, S., Pomarole, M., Jordan, G., Levchenko, K., McCoy, D., Voelker, G.M., and Savage, S. (2013, January 23–25). A fistful of bitcoins: Characterizing payments among men with no names. Proceedings of the 2013 Conference on Internet Measurement Conference, Barcelona, Spain.10.1145/2504730.2504747 ↗
29. Spagnuolo, M., Maggi, F., and Zanero, S. (2014, January 3–7). Bitiodine: Extracting intelligence from the bitcoin network. Proceedings of the International Conference on Financial Cryptography and Data Security, Christ Church, Barbados.10.1007/978-3-662-45472-5_29 ↗
30. Balaskas, A., and Franqueira, V. (2018, January 11–12). Analytical tools for blockchain: Review, taxonomy and open challenges. Proceedings of the International Conference on Cyber Security and Protection of Digital Services (Cyber Security), Scotland, UK.10.1109/CyberSecPODS.2018.8560672 ↗
31. Arner, D., Barberis, J., and Buckley, R. (2017). FinTech and RegTech in a Nutshell, and the Future in a Sandbox, CFA Institute Research Foundation.10.2139/ssrn.3088303 ↗
32. Demirhan, H. (2019). Effective taxation system by blockchain technology. Blockchain Economics and Financial Market Innovation: Financial Innovations in the Digital Age, Springer International Publishing.10.1007/978-3-030-25275-5_17 ↗
33. Massad, T. (2019). It’s time to strengthen the regulation of crypto-assets. Economic Studies at Brookings, The John F. Kennedy School of Government, Harvard University.
34. Bornman, M., and Soobramoney, J. (2022). Encouraging a Culture of Tax Compliance for South Africans Owning and Using Crypto Assets, College of Business & Economics, University of Johannesburg.
35. (2025, June 28). The Top 10 Places to Spend Your Crypto in SA. Available online: https://www.moneyweb.co.za/in-depth/fivewest/the-top-10-places-to-spend-your-crypto-in-sa/.
36. Javarone, M., and Wright, C. (2018, January 15). From bitcoin to bitcoin cash: A network analysis. Proceedings of the 1st Workshop on Cryptocurrencies and Blockchains for Distributed Systems, Munich, Germany.10.1145/3211933.3211947 ↗
37. A survey on security and privacy issues of bitcoin10.1109/COMST.2018.2842460 ↗
38. Is non-fungible token pricing driven by cryptocurrencies?10.1016/j.frl.2021.102097 ↗
39. Decentralized mining in centralized pools10.1093/rfs/hhaa040 ↗
40. Blockchain and crypto forensics: Investigating crypto frauds10.1002/nem.2255 ↗