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Golix Plans to Launch ICO but Zimbabwean Regulator Rings Alarm Bells

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Golix ICO

The Securities Exchange Commission of Zimbabwe (SecZim) has warned investors against investing money in unregulated exchanges and securities following plans by Golix to issue a multi-million dollar initial coin offering (ICO). According to sources, the Harare-based cryptocurrency exchange is seeking to raise a minimum of $10 million. The company would be the first bitcoin startup in Zimbabwe to use this innovative way to raise funds.

The ICO Boom

An initial coin offering (ICO) is a revolutionary way to raise the capital needed for new cryptocurrency projects by issuing a percentage of the initial coins supply among early-stage investors. Similar to investing in a company’s stock, the value of the new coin linked to the digital currency project has the potential to gain in value as the project performs well. Once successfully launched, the new coins or tokens can be traded on cryptocurrency exchanges.

Globally, ICOs have appealed to blockchain companies as the next big thing in corporate fundraising and speculative investing. In 2017 alone, over $4 billion dollars were raised through this new form of fundraising.

However, ICOs have faced hurdles in the form of financial regulators, central banks, and governments which are concerned about the disruptive nature of cryptocurrency technologies and their potential for illegal uses. Last year, both China and South Korea banned ICOs.

ICO to Fund Regional Expansion Amidst Regulatory Pressure

Golix, which traded over $1 million worth of bitcoin last month, is looking to launch its ICO by the end of March, or latest in the second quarter, according to sources. The company which recently enabled Ether and Bitcoin Gold trading on its digital currency exchange intends to raise money to fund its entry into other African markets.

However, Securities Exchange Commission of Zimbabwe (SecZim) CEO, Tafadzwa Chinamo cautioned the public against dealing with unregulated exchanges and securities as there is no legal recourse in case of mishaps.

“Investing in cryptocurrencies in Zimbabwe is a personal decision. The SecZim advises against investing in securities that are not regulated for a few obvious reasons. Investment in cryptos in Zimbabwe is not protected by any law in any way,” Chinamo stated.

According to Chinamo, unlike IPOs which are governed by strict rules that foster transparency and disclosure and ensure investors are not misled by fraudulent persons who float worthless securities, ICOs usually operate in a legal grey area, though this is largely in part due to the lack of cryptocurrency regulation in Zimbabwe.

Locally, companies launched IPOs are required to submit registration statements, financial statements dating back five years, and are also required to undergo valuation by independent financial advisors to determine the fairness of the quoted IPO share price. These disclosures are subject to review for compliance by the market regulator.

ICOs, on the other hand, operate on the fringes with little or no regulatory oversight. Usually, startups launching ICOs will release a technical whitepaper explaining their project and will market their token sale in the hope that prospective investors will buy into the project.

Having said that, many Zimbabweans may choose to ignore the warnings as the cryptocurrency mania takes root in the country. A few months ago the high demand for bitcoin on the local exchange drove the price to almost double of where it was trading at on international exchanges. The demand was buoyed by a debilitating liquidity crunch and acute cash shortage in the country that has affected individuals and businesses who want to engage in commerce and international trade. Hence, cryptocurrencies like bitcoin remain popular among Zimbabweans as an alternative currency and as an investment, which could, in turn, help Golix’s ICO funding ambitions.

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Binance Launches Fiat-to-Crypto Exchange in Uganda

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Binance Launches in Uganda

Global bitcoin exchange Binance has launched a new fiat-cryptocurrency exchange in Uganda. The exchange will also be offering a reward of 0.5 BNB to the first 20,000 users that register on the site as part of its promotion in Uganda.

The announcement comes nearly two months after Binance partnered with Crypto Savannah, Made in Africa initiative, and Msingi East Africa to promote economic development in the East African country.

Changpeng Zhao and Yi He founded Binance in 2017 and raised $15 million through an initial coin offering for its ERC20 token BNB in July of the same year.

The exchange plans to move its offices to the island nation of Malta after the implementation of stricter regulations in China and Japan. In January 2018, Binance was the largest crypto exchange with a market capitalisation of $1.3 billion.

Binance in Uganda

BinanceBinance will also offer its Ugandan users a month of zero trading fees when trading goes online. The exchange will announce the opening for trading at a later date.

Users can find out if they have won any rewards by logging into their accounts and accessing ‘Distribution History’ in the Account Center. In addition, users will be required to complete ID verification to be able to withdraw funds from Binance.

Ugandan users will enjoy an exchange that offers fast transactions of up to 1.4 million per second and state-of-the-art storage technology for utmost security. The exchange also provides 24/7 customer support and has a user-friendly interface.

The presence of Binance in Uganda aims to boost financial inclusion in the country, which has increased from 28 percent in 2009 to 54 percent in 2013 according to its national financial inclusion strategy 2017-2022.

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LINE Corp to Launch Cryptocurrency Exchange BITBOX in July for Global Trading

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BitBox
Image by linecorp.com

The developers of popular messaging app LINE and LINE Group’s cryptocurrency and blockchain company LVC Corporation have announced that they are set to launch a new cryptocurrency exchange called BITBOX in July 2018. The Japan-based firm made the announcement during the LINE Conference 2018 held in Tokyo.

The New BITBOX Exchange

BITBOXBITBOX will offer over 30 high-demand cryptocurrencies to users globally with the exception of Japan and the US. The exchange will trade coins such as bitcoin, ether, litecoin, and bitcoin cash while charging low trading fees of 0.1 percent. BITBOX will support 15 languages, according to the company press release.

The selected cryptocurrencies for the exchange have undergone an extensive screening exercise and have been picked by an internal committee, promising users a convenient and safe trading experience. LINE will also incorporate its top security standards to the cryptocurrency exchange.

LINE Corporation CEO Takeshi Idezawa said:

“As a key part of LINE’s new financial services, BITBOX shows our commitment to fulfilling the growing demand for more diverse financial options. With BITBOX, LINE users will be able to access cryptocurrencies more easily, while also being assured of state-of-art security measures to protect their assets.”

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Nigerians Have Invested Over $5m in Cryptocurrencies Despite Regulator Warnings Says KureCoin Hub

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Nigerians Invest in Cryptocurrencies

Nigerians have invested over five million US dollars in the cryptocurrency market in the last couple of years according to data from Nigerian cryptocurrency platform KureCoin Hub.

The data shows that Nigerian retail investors are investing heavily in the cryptocurrency market despite warnings from the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) against investing in an unregulated market.

KureCoin Hub’s co-founder and CEO Tega Abikure has criticised the stance regulators have taken and argues that the country will lag behind as other countries enjoy the benefits of blockchain technology and cryptocurrencies. Abikure told New Telegraph:

“It is not a matter of whether the government likes it; it is about whether they need it. I am not sure the internet was liked when it first came. […] It is not a matter of whether they are going to embrace it; it is about when they are going to do so.”

Abikure observed that other countries such as Uganda and South Africa have already taken steps towards adopting blockchain technology while Kenya is pushing forward with a functioning blockchain taskforce.

“Nigeria is being left behind,” he noted.

The Blockchain as a Source of Foreign Direct Investments

Abikure also believes that blockchain technology could be a major source of Foreign Direct Investments (FDIs) in the next five to ten years. In addition, he is of the opinion that a lot of money is being made in cryptocurrencies on the continent with most of it leaving Africa’s economy.

On one of the benefits of blockchain technology, he said: “[The blockchain] is completely transparent and cannot be changed; it can be used to create a decentralised system of payment where the taxpayer had an unhindered access to the collector which is the government. It enhances revenue collection and removes the challenges of remittances.”

Blockchain technology can also improve the banking sector, the electoral process, the use of donations in charitable projects, and the supply chain, among many other use cases.

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