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Kenyans are Cashing in as Bitcoin Trading Gains Popularity



Kenyans are cashing in on bitcoin

Kenya is experiencing a digital currency trading explosion with millions of shillings being invested by individuals who are hoping to cash in on its volatility. Cryptocurrencies such as bitcoin and ether are the top choice for local traders due to the massive price rallies they have experienced since the beginning of the year. Even the Central Bank of Kenya’s (CBK) bitcoin-unfriendly position has done little to dampen people’s appetites for the cryptocurrency markets.

The Rise of Bitcoin Trading Clubs

The story of one Arlene Mugambi highlights bitcoin’s potential to improve financial fortunes. After quitting her job at a local telco, Mugambi spent the next two and a half years dabbling in a small business with little success. Things changed when she discovered the world of cryptocurrencies and decided to try her luck trading digital currencies. 15 months down the line, Mugambi has become a full-time cryptocurrency trader and makes up to a 100,000 shillings ($1,000) every month.

Bitcoin is the first decentralised digital currency that operates on peer-to-peer technology and runs on an immutable open-source distributed ledger network called the blockchain. The digital currency is devoid of any intermediaries such as banks.

Mugambi is a member of a bitcoin trading club that boasts around 1,000 members. A new trend is emerging where Kenyan traders are forming clubs and pooling their resources to participate in bitcoin mining. Bitcoin mining is the process where participants in the bitcoin network (known as miners) contribute their computing power to solve complex algorithms and validate transactions on the blockchain for which they are rewarded with new bitcoins.

Speaking to Business Daily Africa, Mugambi says,

“I was doing other things until I realised that you can capitalise on this business of digital currency and make some good returns out of it. This is what I do full-time, combining that with going to educate people about Bitcoin, whether they want to buy coins or mine.”

Those involved in bitcoin trading clubs hope to gain from rising values of digital currencies being witnessed this year with bitcoin currently trading at $8,200 up from $1,000 at the start of the year. Likewise, ether has risen from about $8 at the beginning of the year to the present $367.

Bitcoin is yet to be Accepted by Market Regulators

The Central bank of Kenya (CBK) has in the past warned the public against transacting in bitcoins. The CBK has pointed out the fact that bitcoin is not recognised as a legal tender in the country and there are no proper regulatory structures governing its use. Therefore, should consumers lose their money while speculating in cryptocurrencies, there are very few avenues for legal recourse.

According to Justice Gatuyu, an advocate in the cryptocurrency space, “In case of dispute, the recourse avenues available to traders are very limited, restricted only to instituting a civil case between the parties.”

Lately, though CBK seems to be softening its stance in the face of dialogue with cryptocurrency and fintech stakeholders, and is exploring the potential for blockchain technology.

The Potential for Huge Returns Outweighs the Risks

Kenyans, however, have shrugged off the warnings and risks, and are instead focusing on the potential of huge returns. For most people, the ROI from bitcoin trading surpasses that of traditional investment classes.

According to Raymond Kaptich, a civil engineer and director at a bitcoin trading club, argues that most investments have an element of risk and claiming bitcoin is a conduit for illegal activities is far from the truth. He adds,

“While the CBK raised the issue that digital currency can be used for illegal activities, the same applies to hard currency. Every digital platform you use to trade has an IP address, therefore every wallet can be traced […] Saying that you’re on your own in the event of loss of bitcoin … this applies everywhere, irrespective of whichever investment you make.”

The local bitcoin craze even seems to be bridging the gap between tradition and technology. Last week in Naivasha, Anthony Mburu who is planning to wed Elizabeth John, decided to pay his dowry using bitcoin. Choosing to forego traditional forms of payment such as livestock, cash or mobile money, Mburu decided to offer his in-laws the digital currency which also acts as an asset. The family accepted the bitcoin payment, which has the potential to increase significantly in value in the coming months.

Kenya remains a fruitful place for bitcoin innovation with a number of financial players exploring ways to incorporate cryptocurrency technology into their business models. In addition, there are regular meetups where cryptocurrency traders, freelancers, dedicated co-working spaces, and entrepreneurs exchange views and discuss common challenges facing the bitcoin space.

While bitcoin trading remains a regulatory grey area, traders can currently still go about their business. However, it would be helpful if policymakers could come up with a legal framework that would recognise bitcoin as a legitimate investment class.

If you are based in Nairobi and you would like to learn more about bitcoin, attend the Nairobi Bitcoin Meetup on November 30 at the Marble Arch Hotel.


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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