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Are Kenyan Regulators Finally Changing Their Stance on Bitcoin in Kenya?



Bitcoin in Kenya

Digital currencies have a come a long way since their inception almost a decade ago. From operating on the fringe of the financial ecosystem they are now becoming an accepted medium of exchange.

Bitcoin, a decentralized virtual currency with no ties to any central bank or financial institution, is slowly making its way into the African financial ecosystem. The peer-to-peer nature of the currency and it not being susceptible to inflation and political upheavals, that have plagued fiat currencies, makes it an attractive value proposition for the continent. That being said, there are still hurdles for bitcoin adoption with Kenya being a prime example of that.

The crypto-debate in Kenya

The African country has a sizable bitcoin community with fintech companies, such as BitPesa using bitcoin for international money transfers. However, local market regulators are yet to see bitcoin as an acceptable medium for transactions. In 2015, the Central Bank of Kenya (CBK) joined its peers in Nigeria, and other parts of the world, in sounding warnings about the dangers of bitcoin, saying the risks far outweigh any benefits that could be gained. Furthermore, Kenya’s central bank instructed local banks in Kenya not to provide banking services to bitcoin startups.

While their position has remained unchanged, recently, another market regulator is reading from a different script. In April, the Capital Markets Authority of Kenya (CMA) announced plans to holds a forum that will give fintech players an opportunity to interrogate regulators on the current regulations as well as allow regulators to understand the unique challenges faced by these companies.

Paul Muthaura, the CEO of the authority said in a statement:

“The ultimate objective of the authority is to provide Fintechs in the capital markets such as; finance smartphone ‘apps’; equity crowdfunding and peer-to-peer lending platforms; Robo-advice for investment; blockchain technology; big data; crypto-currency and other finance focused technology products, with a conducive environment where they can test their innovations in a relaxed regulatory environment before taking them to the market.”

New Opportunities

While market regulators are sending mixed messages, the World Bank recently revealed its plan to partner with the Kenyan government in using blockchain technology to sell government bonds. The blockchain is the underlying technology on which bitcoin is built on. Blockchain technology provides a distributed ledger that can be augmented to enable limitless possibilities in terms of applicability. Examples of where blockchain technology can be used include digital identity verification, proof of ownership of assets and intellectual property just to name a few.

The CBK is one of the collaborators in this project and this has the potential to soften their stance on digital currencies in the future. According to the CEO of BitPesa, Ms. Elizabeth Rossiello the resistance by a section of market regulators is similar to other situations in Europe, Asia, and the US. But with more awareness and information, she believes things are looking up for cryptocurrency in the country.

“Internationally, all of the largest financial institutions have Bitcoin and blockchain programmes, investments and even patent applications. Visa Europe commented that working with bitcoin “is no longer a choice anymore,” proving that the technology has moved from the fringes towards the mainstream of financial innovation. Bank of America filed applications for 10 different patents using Bitcoin and blockchain technology,” Rossiello stated.

While regulatory approval for bitcoin as a legal payment method in Kenya may still be a long way off, the debate shows people are beginning to see bitcoin and cryptocurrencies as an agent of change and innovation when it comes to financial services.


Bitcoin Remittance Startup BitPesa Launches in Ghana



BitPesa Secures Funding

Nairobi-based bitcoin remittance startup BitPesa has launched in Ghana to continue the growth of its footprint in the West African region. The platform will enable Ghanaians to make low-cost global payments using their local currency, the Cedi.

BitPesa’s services will make it easier for Ghanaians to make GHS payments that will settle in more than ten currencies, including NGN, UGX, and ZAR. This move shows the company’s dedication “to facilitating intra-Africa trade by increasing the ease and speed of doing business in Ghana”.

Launched in Nairobi, Kenya in 2013, BitPesa, is a digital payment and foreign exchange platform that utilises the Bitcoin blockchain to boost the speed of business payments while lowering the transfer cost to and from frontier markets. With its best-in-class products and customer service, BitPesa seeks to significantly reduce the cost of payments from Ghana to other markets such as Nigeria, where it already has operations. Ghana was BitPesa’s “natural choice for expansion” since it is the second largest economy in the West African region after Nigeria.

BitPesa’s CEO, Elizabeth Rossiello, said in a company press release:

“We are constantly looking for ways to promote intra-African trade, so we’re very excited about our services in Ghana.”

“Ghanaians should be allowed to make global payments using their own currency and we are excited to facilitate this. We will continue to improve service offerings, compliance, and value for our new Ghanaian customers,” she added.

BitPesa’s platform makes it possible for businesses to make payments in multiple currencies and has operations in Kenya, Nigeria, Uganda, Senegal, DRC, the UK and Europe. Following the launch, Ghanaian customers will be able to buy and sell bitcoin on the online platform with businesses being able to make payments intra-Africa to Ghanaian mobile accounts. Currently, BitPesa is connected to two mobile networks in Ghana with more services expected to come with time.

The move comes weeks after BitPesa made its acquisition of TransferZero, a leading Madrid-based digital payments company, expanding its footprint in the Caribbean and Latin America markets.

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Father Defends Son Against Fraud Allegations by Claiming Bitcoin Hack



Fraud Allegations by Claiming Bitcoin Hack

A South African court is handling a fraud case where a farm owner’s son is being accused of misappropriating investor funds and thereafter fleeing abroad. Speaking before the Pretorian High Court the desperate father insisted his son should not be held responsible for the loss of R1.3 billion of his investor’s money and instead blamed hackers.

Alleged Theft of Bitcoin Funds

The son, A’ri’El Willem Theron, reportedly began his alleged pyramid-like investment scheme in 2015, going by the name Love and Let’s Live (LLL).  Following a warning from the Financial Services Board stating he was not a licensed financial services provider and subsequent freezing of his accounts, investors funds were moved to Panama. However, when investors demanded refunds Theron Jr. told them the money had been used to buy bitcoin, which had then been stolen from storage by a hacker.

He even went ahead to tell them he had left the country seeking to start fresh and that he was sorry about the situation. The trading scheme was wound up last month with the company’s liquidators applying for the liquidation of Ruby Success, a farm owned by his father. Liquidators have argued R41 of the money out of which Theron Jr. managed to defraud investors was used to purchase the farm for his father, Andre Theron.

Only last week, Andre Theron unsuccessfully tried to convince the court not to liquidate his company Ruby Success Inc., which owns the R57 million farm in Mpumalanga. The court gave him a respite until April 5, 2018, where he should provide reasons why the company should not be liquidated.

Prelevance of Bitcoin Scams in South Africa

Interestingly, reports surfaced a few weeks ago of several South Africans having been conned after investing in a suspected bitcoin Ponzi scheme. Many investors had invested anywhere between R16,000 and R1.4 million worth of bitcoin with BTC Global and had received inconsistent payouts until mid-February when they stopped entirely. While the firm has denied any wrongdoing the architect behind the scheme has since gone underground and is being pursued by authorities.

For the case of Theron Jr., his father asserts that his son took precautions and stored more than double of his investors’ funds offshore to cover investments. He also said his son used the funds to buy bitcoin since after the closure of his accounts it was the only viable way to pay investors. He denied any of the proceeds of the scheme had been used to purchase the farm or he and his son were fraudsters, alleging Theron Jr. had lost R700 million of his own money in the scheme. Meanwhile, prosecutors are following up on leads gained from the father’s testimony when he let it slip his son may be hiding in Ireland and hope to apprehend him soon.

It has become common practice among bitcoin-related Ponzi schemes to claim that they were hacked when they disappear with investors’ funds, which puts Andre Theron’s statement that his son’s funds digital currency holdings were hacked and stolen into question.

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Cryptocurrency Market Analysis March 16, 2018 – HODL: Friend or Foe?



Cryptocurrency Market Analysis

The ‘HODL’ strategy that everyone has been talking about during the beginning of the cryptocurrency market fall, is now fading away. Regulations, rumours, and ad banning by Google and Facebook managed to crumble investors’ trust in this market. Having said that, the blockchain has gained a lot of popularity all around the world. We still believe that even after a big tumble, as this one, cryptocurrency values will come back skyrocketing again, aiming for at least one trillion in total market value by the end of this year.

Price Analysis

Bitcoin (BTC)

In our previous analysis, we were expecting for the price to move sideways and even drop again to retest the local support from $9,000. The price did move in a sideways direction and this week broke below to retest a strong support at $7,500.

Currently, the candlestick patterns emerged above the mentioned support are indicating a low bullish signal, which can get stronger if this week will close back above $9,000. Otherwise, we could see a continuation of the down move, slowly heading for the key level support from $6,000.


Ethereum (ETH)

Ether proved itself stronger at the beginning of the week, but it was also pulled into the whirlpool in which the entire market entered at the end of last year. As we expected, bulls could not breach above the latest highs, at the end of February, and currently is trading in a key support area, right above the $600 level.

For the moment bulls seem to have balanced the power and the drop could see a short break around these levels. A strong move upwards is highly unlikely in the following week, and prices could see some stability below $800.


Ripple (XRP)

The Ripple company has been very active in the media lately promoting new partnerships for their services, but the XRP continued the down move alongside the other cryptocurrencies.

Currently, the price action shows a slowdown of the drop at the key support area around $0.70. This drop just builds up a stronger accumulation area. Even though the bears’ pressure has yet to dissipate, the wheel might soon turn in the favour of the bulls.



Buroka Tech

This cryptocurrency market analysis is being presented by Buroka Tech. Buroka Tech is cryptocurrency-focused technology provider for financial institutions. 

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