Connect with us

Bitcoin

Golix Shelves ICO and Takes Reserve Bank of Zimbabwe to Court Over Cryptocurrency Ban

Published

on

Zimbabwe Cryptocurrency Ban

Following the directive by the Reserve Bank of Zimbabwe (RBZ) to ban cryptocurrency, one of the largest cryptocurrency exchange in Zimbabwe, Golix, has now gone to court challenging the directive by Zimbabwe’s central bank after it was forced to shelve its token sale, which was scheduled to start on May 14. and was asked to cease operations by the central bank.

Golix informed Bitcoin Africa on May 15 that it has decided to suspend its planned ICO due to the RBZ’s new directive, which is effectively forcing them to shut down its operation by preventing banks from dealing with cryptocurrency startups. Moreover, as reported by TechZim, the central bank also reached out to Golix directly, in the week to follow the directive announcement, informing them that they are required to cease operations entirely.

Aside from warning the general public to keep away from decentralised digital currencies, RBZ sent a directive to all banks on May 11, 2018, giving them a maximum of 60 days to end any relationships they may have with cryptocurrency exchanges. Several bank accounts belonging to Golix have already been closed.

The circular, which was issued by the Registrar of Banking Institutions in Zimbabwe, N. Mataruka, lists Golix and Styx24 as the country’s cryptocurrency exchanges. In the circular, one of the reasons RBZ gave regarding the ban was that they wanted to be able to “safeguard the integrity, safety and soundness of the country’s financial system, and to protect the public in general”.

Golix is Fighting Back

Golix Launches ICOGolix will not go out without a fight. Golix has presented the High Court of Zimbabwe with three arguments on why the ban of cryptocurrency in the country is not just. In their first argument, Golix questioned whether the RBZ has any legal authority to ban cryptocurrencies. In their explanation, Golix detailed how they had severally met the RBZ including a day before the circular was released. According to their first argument, RBZ has no authority over Golix and neither have they, in their engagements, ever shown or behaved in a manner that indicated so.

Golix’s second argument terms RBZ’s directive as unfair based on the legal principle of administrative justice as the central bank of Zimbabwe neither gave reasonable notice nor the right of response. This, according to Golix’s argument, means the RBZ breached the right to Administrative Justice considering that by statue, RBZ is an administrative body.

A quote from the second argument by Golix as shared by Techzim states:

“Applicant was never advised prior to the ban that it will be implemented even though Respondents had ample opportunity to advise Applicant of same. As aforesaid, the last meeting between the parties was held on 11 May 2018. Four officials from the Applicant including myself attended the meeting while fifteen officers, including the Registrar of Banking Institutions represented the Respondents. In that meeting, the discussions were more of Respondents wanting to learn and understand the technology behind our business and our business model. The impression we got was that Respondents wanted to understand in order to begin working on regulation. No mention was made of any impending ban on our business”.

Unconstitutional Ban

According to Golix’s third argument, the ban by the RBZ is unconstitutional. Golix sited Section 68 of the constitution by saying: “Section 68 of the Constitution requires that administrative action be lawful, reasonable, proportionate and procedurally fair. I humbly submit that Respondents’ actions fell short of the standard required in the Constitution”.

In their defense, they give reasons as to why the view the directive as unconstitutional as:

“First, the press statement issued by 1st Respondent does not state the purpose for which the ban was imposed. The reason why it was necessary to impose the ban is not stated in the press statement. We can only speculate as to why the ban was imposed. In the absence of a clear reason for the imposition of the ban, it is really difficult to assess the proportionality of 1st Respondent’s decision vis-a –vis the goal it was intended to achieve. Nonetheless, even in the absence of a clear reason for the ban, it is not difficult to see that the decision is disproportionate”.

Following the directive, Golix issued a statement via their blog notifying its customers that unless RBZ changed its position before the 60-day window period given, they “will not be able to send or receive fiat currencies for cryptocurrency trades”.

While the High Court of Zimbabwe will determine the fate of the case between Golix and RBZ, the move by Zimbabwe’s central bank to ban cryptocurrencies is a clear indication of how most African states are yet to embrace digital currencies such as bitcoin. And while we cannot speculate on the ruling that the court will make, this move could slow down the adoption of cryptocurrencies in other African markets.

Bitcoin

Mauritius to Receive World’s First Digital Asset Custody Regulatory Framework

Published

on

Digital Asset Custody Regulatory Framework

Mauritius is set to receive the first digital asset custody regulatory framework in the world, according to an announcement by the country’s Financial Services Commission (FSC). The framework will be effective from March 1, 2019.

The Digital Asset Custody Regulatory Framework

On September 17, 2018, digital assets were recognised as an asset class for Sophisticated and Expert Investors by the Financial Services Commission, Mauritius (FSC). This was followed by the FSC issuing a consultation paper with the intention of getting public and stakeholder feedback on the proposed Custodian Services (Digital Asset) License regulation, as BitcoinAfrica.io reported in November 2018. The license enables its holder to offer custody services for digital assets.

“In revolutionising the global FinTech ecosystem through this regulatory framework for the custody of Digital Assets, my Government reiterates its commitment to accelerating the country’s move to an age of digitally-enabled economic growth. As an African country, we look forward to fostering further innovation and bringing more prosperity to the region,” said Pravind Kumar Jugnauth, Prime Minister of the Republic of Mauritius.

The regulatory framework will make Mauritius the first jurisdiction to create a “regulated landscape for the custody of digital assets. Holders of the Custodian Services (Digital Asset) License will equally have to comply with the applicable framework for AML/CFT, in line with international best practices,” the announcement read.

Support for the Regulatory Framework

Digital Asset Custody Regulatory FrameworkAccording to the FSC, the regulatory framework was created after consultations with the Organisation for Economic Cooperation and Development (OECD) on the regulation and governance of digital financial assets.

The Chief Executive of the FSC, Harvesh Seegolam, asserted: “The FSC is committed to implementing enabling frameworks which facilitate the development of the Mauritius IFC. We continue to collaborate with our international counterparts and stakeholders in introducing the appropriate regulatory mechanisms.”

The Bank of Mauritius is also in support of the regulatory framework. The bank’s governor, Yandraduth Googoolye, said: “The Bank of Mauritius is supportive of innovation in the financial services sector. Banks, depending on their respective risk appetite, are encouraged to develop business relationships with players in the Digital Assets segment.”

In light of this announcement, the custody services license regulation could create a thriving cryptoasset industry in Mauritius, which could help position the country as the go-to digital asset investment hub on the continent.

Continue Reading

Bitcoin

Ghana’s SEC Mulls Over Cryptocurrency Regulation Framework

Published

on

Ghana Cryptocurrency Regulation

Ghana may soon receive a cryptocurrency regulation framework that would enable local bitcoin startups and exchanges to operate legally and without the threat of a potential regulatory crackdown.

Cryptocurrency Regulations in Ghana

According to News Ghana, the country’s financial regulator, the Securities Exchange Commission (SEC), is contemplating regulating cryptocurrencies. The commission is also considering licensing exchanges dealing with digital assets.

The news comes at the backdrop of the increasing number of fraudulent “crypto” investment schemes in the West African nation. Last year, over 100,000 Ghanaian investors were reportedly victims of a crypto investment scam called Global Coin Community Help (GCCH), which saw the investors lose 135 million Ghanaian Cedi.

The SEC Deputy Director General, Paul Ababio, said: “[…] Desist from dealing with these crypto entities. […] When you choose to go there you are on your own. We have adopted a wide range of changes on it and we are still doing our research and gathering information. We welcome any input that people might have to help us formulate a view on how we should deal with it in Ghana.”

The State of Cryptocurrencies in Ghana

GhanaLike many central banks in Africa, the Bank of Ghana has warned citizens against investing or transacting in cryptocurrencies due to the risk involved.

Frances Van-Hein Sackey, the Secretary to the Bank of Ghana, in response to the GCCH scam, wrote in a statement: “Anyone who does business with these entities does so at his or her own risk and the Bank of Ghana will not be liable for the refund of any deposit lost by a depositor.”

The current state of cryptocurrency in Ghana could, however, change if the SEC regulates the sector, according to a report by GhanaWeb. The SEC ‘Ababio said that Ghana’s Economic and Organised Crime Office (EOCO) is probing three cryptocurrency companies whose operators are currently missing in action.

“[…] It has been very preliminary and it is a new area of our work that we are going to be quite strong on as well. We will be coming out shortly with a lengthier statement and we will name some of these firms,” he stated.

Furthermore, Ababio revealed that some of these firms operate online and do not have a physical presence. These firms will be classified as illegally operating in the investment sector, he added.

What Could This Step by the SEC Mean for Ghana?

According to the CEO of Modulus, Richard Gardner, the move by Ghana’s SEC is commendable since regulation of the sector will provide standard rules for exchanges to operate by. He believes that this will make the industry viable while protecting consumers from exchanges that engage in market manipulation, abusive trading, and money laundering.

Gardner also noted that the public and private sectors should work together towards creating these regulations.

“The best way to regulate an industry, especially one which is so technical, is to bring together those involved in the private sector, along with those from the public policy side. Together, we can usually find a way to encourage industry growth while protecting consumers,” he said.

Regulations can have a substantial impact on the local bitcoin startup community. Hence, it will be interesting to follow these developments in the coming months as they could mean the difference between Ghana establishing itself as an African leader in the cryptocurrency space or not.

Continue Reading

Bitcoin

Places in Africa Where You Can Find a Bitcoin ATM

Published

on

Places in Africa

There are currently over 4,000 Bitcoin ATMs across the globe. The majority of them are found in the United States. Africa, however, is also home to a handful of Bitcoin ATMs. In this article, you will discover the complete list of places in Africa where you can buy bitcoin with fiat currency using a Bitcoin ATM.

What Are Bitcoin ATMs?

Bitcoin ATMs function like traditional cash machines with the difference being that instead of cashing out money from your bank account, you can buy and, in some cases, sell bitcoin against local fiat currency.

Zimbabwe bitcoin atmIn 2013, Canada received the world’s first Bitcoin ATM in the Waves Coffee Shop in Vancouver. Then, the following year, the first machine in the United States was introduced at a cigar bar in New Mexico. Two months later, Coinme installed another one in Washington that came with a money transmitter license. Since then, the market for Bitcoin ATMs started to steadily grow.

Today, North America leads the pack with 71.9 percent of Bitcoin ATMs, followed by Europe with 23 percent and Asia with 2.3 percent while Australia and Africa have a meagre 1.3 and 0.1 percent respectively.

Bitcoin ATMs in Africa

In total, there are currently nine reported Bitcoin ATMs in Africa. 

South Africa

South Africa, as a leader in bitcoin adoption, is home to five cryptocurrency ATMs that are situated in Johannesburg, Pretoria, Nelspruit and Cape TownOn Average, these ATMs can dispense between a minimum to a maximum of 100  to 1 Million South African rands (ZAR). Most ATMs require identity verification if you are buying more than 5,000 rands.

Nonetheless, none of these ATMs dispenses cash as they operate only fiat-to-crypto. One bottleneck that might discourage people from using the ATMs is high fees ranging from 8 to 14 percent.

Kenya

Kenya received its first Bitcoin ATM last year in the country’s capital, Nairobi. Operated by the BitClub Network, it is also a fiat-to-crypto only ATM and a minimum of 500 Kenyan Shillings worth of bitcoin and litecoin can be purchased using the machine. 

Uganda

The Kampala Post Office hosts Uganda’s only Bitcoin ATM, which is run by KIPYA Bit2Big, a local Blockchain company. Ugandans can use the ATM to buy bitcoin, bitcoin cash and ether.

Zimbabwe

Golix, the first ever cryptocurrency exchange in Zimbabwe and one of the biggest in Africa, also runs a Bitcoin ATM.

Based in the Golix offices in Harare, this machine provides an essential service in a cash-strapped country since it allows buying and selling of bitcoin, bitcoin cash, and litecoin.

Djibouti

Somewhat surprisingly, there is also a Bitcoin ATM in Djibouti. The currently only Bitcoin ATM in the small East African country is located at Appart Hôtel Moulk.

Interestingly, the ATM’s operator, Group DOS, plans to introduce two more Bitcoin ATMs in Djibouti. Group DOS CEO, Eleyeh Issa, told BitcoinAfrica.io that two new Bitcoin ATMs will be set up in the coming weeks, one at the airport and one at a shopping mall. 

While Bitcoin ATMs tend to come with high fees, which makes them less appealing purchase option for larger investors, they do help to push adoption among smaller investors who want to get started with their first bitcoin investment.

Continue Reading

Bitcoin Price

Popular Posts