A legal dispute involving African crypto exchange Yellow Card has drawn attention to how cryptocurrency transactions are treated under Tanzanian law.
The case, heard in the Commercial Division of the High Court of Tanzania, involved a dispute between Yellow Card Tanzania Ltd and a former employee, Nyamwero Michael Nyamwero. The company accused the former country director of unlawfully accessing company bank accounts and misappropriating approximately $1.19 million.
To resolve the issue, both parties initially agreed to a Deed of Settlement, in which the defendant promised to repay the disputed amount through four instalments. However, when the payments were not completed on schedule, Yellow Card filed a lawsuit seeking enforcement of the agreement and repayment of the outstanding funds.
During the court proceedings, the defendant argued that the settlement agreement should be considered invalid because the underlying business activities involved cryptocurrency. The claim was based on the argument that Tanzania does not have a clear regulatory framework for digital assets and that cryptocurrencies are not recognized as legal tender in the country.
The court rejected this argument. In its ruling, the High Court stated that the absence of formal cryptocurrency regulations does not automatically make crypto-related activities illegal.
The judges emphasized several important legal principles. First, the validity of a contract does not depend on whether the activity involved is specifically regulated. Second, cryptocurrency transactions themselves are not unlawful in Tanzania unless they are connected to illegal activities such as fraud or money laundering. Finally, parties who freely enter into agreements are expected to honor their contractual obligations.
Based on this reasoning, the court ruled that the settlement agreement between Yellow Card and the former employee remained legally binding. The defendant was therefore found to have breached the agreement and was ordered to pay the outstanding amount owed to the company.
The decision has attracted attention in legal and financial circles because it touches on a major issue across many African markets: the legal status of cryptocurrency transactions in countries where regulations are still evolving.
While the ruling does not establish a full regulatory framework for digital assets in Tanzania, it provides an important signal that cryptocurrency-related contracts can still be enforceable under existing contract law. For businesses operating in the digital asset sector, the case highlights that courts may treat crypto transactions like other commercial agreements, even in the absence of detailed regulations.
As cryptocurrency adoption continues to grow across Africa, cases like the Yellow Card dispute are likely to play a role in shaping how courts interpret digital asset activities and how regulators approach the sector in the future.
Read also: US Lawmakers Introduce “DEATH BETS Act” to Ban Prediction Markets on Death and War