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Is KeniCoin Kenya’s First Homegrown Cryptocurrency Scam?

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KeniCoin is a Kenyan cryptocurrency that has been in the spotlight recently over allegations of potentially being a scam. BitcoinAfrica.io investigated KeniCoin to determine whether it is a legitimate cryptocurrency or a fraudulent operation. In this article, you will discover our findings.

What is KeniCoin?

KeniCoin claims to be a multi-utility cryptocurrency platform that is fueled by KeniCoin (KNC) tokens. According to the KeniCoin website, the cryptocurrency is backed by real businesses, which is supposed to make it a reliable and predictable payment option for vendors.

The platform claims to offer free and fast peer-to-peer online transactions. Moreover, KeniCoin investors will allegedly receive a high return on investment (ROI) on KNC tokens due to their limited supply and presence of a strong merchant network. Consumers, on the other hand, will be able to enjoy a 40 percent discount whenever they transact using KeniCoin.

Furthermore, KeniCoin claims to provide an alternative saving option to banks, which allows for micro-savings and provides interest. The website describes KeniCoin as the “Next Generation Banking Platform for the people in Kenya and Africa.”

How Does KeniCoin Work?

KeniCoin is marketed as an ERC-20 token based on the Ethereum blockchain. To purchase the cryptocurrency you have to register on the KeniCoin site and provide your name, a username, email address, and password. Once your account has been verified you can proceed to log in.

To get started, you have to fund your account using bitcoin (BTC) or fiat currency via mobile money.

Once you deposit money in your KeniCoin account, you will receive the equivalent amount of KNC in your in-platform wallet. However, during our analysis, we noticed the BTC wallet option appeared to be no longer working. It is unclear whether this is a technical problem or a shift to a fiat-only operation.

If you are looking to convert your KeniCoins to another cryptoasset, there are instructions on the site directing you to the KeniCoin Exchange. Information on the platform states users can trade KeniCoins (KNC) for bitcoin (BTC) or ether (ETH).

The exchange asserts that you can trade your KNC for fiat and withdraw your earnings via a direct bank transfer. Moreover, should you decide to lock away 50 or more KeniCoins in the platform, you are entitled to ten percent interest every month.

The KeniCoin ICO

KeniCoin launched an ICO in July 2018. The token sale was marketed aggressively on local radio and through KeniCoin agents. According to the site, ten million KNC tokens were provided for the ICO and retailed at KES 100 (worth around $1.00).

The site alleges $250,000 was raised from the token sale with 500,000 tokens being sold. Moreover, according to the KeniCoin whitepaper, the newly issued tokens will gain in value. Specifically, the company stated in the whitepaper:

“We are very sure that, within the first 12 month after ICO, the value of KeniCoin will have increased at least 30 folds, which is around 3000%.”

The project road map outlines that 20 percent of the funds raised will go to the founders with the bulk of the remainder being used to develop various platforms accepting KNC payments. The KeniCoin tokens were to be traded on the KeniCoin Exchange, which was launched soon thereafter.

Regulator Warns Against KeniCoin

In January 2019, the Capital Markets Authority (CMA), Kenya’s market regulator issued a press release warning the public against participating in the KeniCoin token sale or trading KNC. The CMA CEO, Paul Muthaura stated,

“It is important for the general public to note that the nature and features of the Capital Raising and Coins Trading promoted by Wiseman Talent Ventures is taking the form of Regulated activities which have not yet been approved by the Authority.”

The regulator expressed its concerns about KeniCoin promising investors a ten percent monthly return on their initial investment on KNC tokens. In addition, the CMA pointed out that KeniCoin was being marketed as rising exponentially in value since its ICO which posed “substantive information asymmetry, liquidity and fraud risks.”

“The Authority is currently investigating the operations of Wiseman Talent Ventures. We have noted discrepancies in the information provided on the firm’s website www.kenicoin.com and the information given to the Authority during interviews of Wiseman Talent Ventures leadership in relation to the total number of Kenicoin sold and the total funds raised,” Muthaura added.

Obscure Founders

AnonymousOur efforts to establish the team behind KeniCoin also proved unsuccessful. According to the KeniCoin whitepaper, the founder of the cryptocurrency is Haron Muthomi Kiriba who is sometimes referred to as Haron Wiseman. We did a little digging to find out more about Wiseman.

What we managed to uncover was a Twitter account under the name Haron Wiseman, which described him as a transformational speaker and founder of Wiseman Talent Ventures. Wiseman Talent Ventures is mentioned in the CMA cautionary statement as the company behind KeniCoin. An online search for Wiseman Talent Ventures was only able to produce an office address.

Also, Haron Kiriba’s Twitter account appears to have been inactive for a while. His LinkedIn profile portrays him as the CEO of a property company. Nothing we uncovered pointed to any prior involvement in the cryptocurrency space or any other venture for that matter.

The KeniCoin whitepaper states that the cryptocurrency is supposedly developed by a number of international blockchain and AI experts. However, their names are not mentioned and their identities – if they ever actually existed – remain unknown which is standard practice in fraudulent cryptocurrency-based ventures.

Providing little to no public information about the company’s ownership structure does not help the company in its attempts to be perceived as a legitimate venture.

More Red Flags

KeniCoin

A critical examination of the information provided on the KeniCoin site and whitepaper reveals a number of inconsistencies and falsehoods. For instance, the KeniCoin whitepaper claims the project is backed by a number of companies yet we can only prove one, Wiseman Talent Ventures, and even its existence is in doubt.

Also, the amount of funds raised during the concluded KeniCoin ICO seems unclear. The site claims $250,000 worth of KNC tokens were sold during its token sale. However, when it comes to distribution of ICO funds, the amount displayed is $5.3 million.

In addition, the company claims KNC is the first local digital currency to be released in the market with a network of up to 10,000 merchants. This is an outright falsehood with research failing to turn up a single business associated with KeniCoin. You will notice most of the statements concerning stability and increasing value of KNC tokens, are tied to the assurance of many businesses in the ecosystem.

Perhaps, the obvious flaw with KNC is the de facto promise of returns for early adopters. The whitepaper states KNC holders can expect the value of the token to increase by 3,000 percent in twelve months after the ICO. At the time of writing this article, the price of KeniCoin published on the company’s website was $3.45.

Currently, there is an update on KeniCoin Exchange teasing users about the launch of a new utility, that will result in the price of KNC rising to Ksh. 10,000 (worth around $100). Strangely, KeniCoin appears immune to market volatility and according to numbers presented on the platform, has so far managed to retain an upward trajectory.

Yet, this does not resonate with what we know of the crypto markets which are highly volatile. In fact, since early 2018, the value of most digital currencies have slumped as the markets have been experiencing a “crypto winter.”

It stands to reason any investment exhibiting a continued uptrend in price over a long period could indicate price manipulation or fraud.

A summary of KeniCoin’s potential red flags include:

  • The mystery surrounding the persona of Haron Wiseman, the alleged founder of KeniCoin
  • The company gives no insight into the ownership structure
  • The alleged rise in KeniCoin price without any real use case outside of trading
  • Lack of a merchant network driving adoption as is claimed in the whitepaper
  • A claim of profits for investors, which no real investment can ever guarantee
  • The Kenyan Capital Markets Authority has issued a warning against KeniCoin
  • Very little technical details on how the cryptocurrency actually works
  • KeniCoin can only be bought and sold on the company’s own exchange

Unavailability for Comment

BitcoinAfrica.io tried to contact KeniCoin to hear the company views on the issues raised by the Kenyan financial regulator. However, this proved difficult as our attempts to engage the KeniCoin team proved unsuccessful.

Initially, we tried to contact them using the phone numbers provided on its website. We managed to get through but were twice rebuffed with the response being “ongoing consultations with management.” At the time of writing this article, no feedback has been forthcoming from KeniCoin.

Interestingly, the KeniCoin staff member who we were able to reach on the phone expressed distrust for news agencies saying, “you social media guys are tarnishing our name.” The company does not seem to want to talk to the media.

KeniCoin ScamBitcoinAfrica.io also attempted to reach out to the Nairobi-based company via social media but our attempts to get in contact with the company over Twitter, LinkedIn and Email were futile. The company’s email address does not work and the company’s Twitter account has been suspended.

Kenyan Crypto Twitter Responds to KeniCoin

Leading figures of the Kenyan cryptocurrency community responded on social media to KeniCoin advertisement on Kameme FM.

Micheal Kimani, Chairman of the Kenya Blockchain Association, tweeted:.

Ken Kimathi, Kenya’s Remitano representative, also shared his opinion about the alleged digital currency scam. He tweeted:

And they were not the only Kenyans to voice their concerns on social media. An ample amount of Twitter users highlighted the project’s unrealistic earnings potential, which makes the company look like a fraudulent operation.

Is KeniCoin a Scam?

Bitcoin ScamWhile there may be people who believe that KeniCoin is a real investment opportunity, it would be hard to ignore the evidence that suggests the opposite.

KeniCoin has several of the same characteristics as crypto scams that have previously penetrated the African market.

KeniCoin may not be different from a typical MLM operation used by pyramid schemes like OneCoin and MMM, which succeeded in defrauding hundreds of thousands of Africans.

Conversely, one may argue that KeniCoin closely resembles a pump and dump scheme where the owners are making money by pumping up the value of KNC and then selling it for a profit on the open market. Once they have made enough profits, they exit, and users are left holding worthless coins.

Moreover, since price discovery for KNC tokens only occurs on the company’s own platform, it is impossible to say how much one KeniCoin is really worth.

Given that KeniCoin makes claims such as: “KeniCoin platform allows you to grow your wealth up to x12 every year,” it is difficult to see how this could possibly be a legitimate cryptocurrency investment.

Conclusion

Investors are always advised to conduct thorough research, consult experts, and use common sense before investing in any digital asset venture.

“Investments” like KeniCoin provide a good example of the type of cryptocurrency investment “opportunity” to avoid. While no one can claim that KeniCoin is a scam until it has been declared a fraudulent operation by a court of law, the mountain of evidence against the company would suggest that it probably is.

Features

Blockchain, Cloud, and Other Modern Technologies Applied in Gaming

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Technologies Applied in Gaming

Gaming has evolved tremendously since its beginnings. New technology discoveries enabled developers to create games that take the concept of fantasy to the next level, making the virtual world so much more alike to the real one. This is only possible through the implementation of new technologies in the world of gaming.

In this article, we will cover the newest technologies that have made their way into gaming, further enhancing this industry.

Blockchain

Kenya Blockchain Report

Since its invention, blockchain was quickly implemented in gaming since it allows for the creation of peer-to-peer games where users can interact without the need of a third party. This aspect made it a great fit for gambling, allowing casinos to build platforms where users can gamble directly with one another in a free and private manner.

An online casino app can already allow people to gamble in a convenient way, as long as they have Internet access. These apps are very advantageous since players don’t have any location or time zone restraints. Furthermore, online casinos are pioneers in privacy and cybersecurity, offering users an all-around quality experience.

However, blockchain can still further improve the gambling and gaming worlds. The potential of this technology is still unfulfilled but, as new startups emerge, innovation follows, making blockchain an ever more viable option for the future of gaming.

Cloud Gaming

The case for cloud gaming makes a lot of sense in 2020. Games are getting bigger each year, the hardware requirements increasing constantly. This makes it difficult for the recreational gamer to keep up with the minimum gaming standards. Updating hardware pieces can be a tedious process that many people don’t want to engage in.

Cloud technologies can allow people to play even the latest games, regardless of the type of machine they are using. Google Stadia is one of the most popular cloud gaming platforms out there. The opinions regarding its performance are varied but, Google is certainly the one company that can pull off this concept.

Ultra Realistic Graphics

Video game graphics are becoming insanely realistic. Sometimes it’s very difficult to discern between reality and a virtual game. This aspect allows for the creation of a more immersive experience, enhancing the entertainment experienced by users. Popular games like GTA 5, Red Dead Redemption 2, and Witcher 3 have some of the best graphics out there, while still being resource effective.

Facial Recognition

Some games tell the story of a protagonist, making you fall in love with that character regardless if it’s Master Chief from Halo or Mario. However, other games allow you to create an avatar, custom to your liking. Until now, this feature was technologically constrained but, facial recognition and 3D scanning can allow you to create an avatar that looks just like you. This technology can personalise the gaming experience like never before.

Virtual Reality

An obvious one on this list, VR is the one technology that can revolutionise the way we interact with games. Whilst this is still experimental and reliant on advanced hardware, with a bit more work and a few more years of waiting, VR can be a commercially viable gaming niche. Regardless if we’re talking about an online casino or an action game, VR can provide the ultimate immersive experience.

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Reserve Bank of Zimbabwe Warms to Financial Innovation

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Financial Innovation

The Reserve Bank of Zimbabwe (RBZ) is warming to the idea of emerging financial technologies as it joins the rest of the world in cautiously welcoming digital money. This was revealed when the RBZ governor, John Mangudya, presented the country’s monetary policy statement for the year 2020 on February 17.

The latest announcement is a continuation of the central bank’s rapprochement towards emerging financial innovations after a turbulent 2018 when it had run-ins with technology companies that sold or facilitated the sale of crypto tokens to the Zimbabwean public.

RBZ’s Change of Heart

The RBZ now agrees that technology and innovations have significantly altered the financial landscape and the way financial institutions offer services and products and that Zimbabwe needs to move with the times.

In his brief statement on the topic, the governor touched on the RBZ’s progress in establishing a regulatory sandbox that will allow innovators to connect to banks and other financial institutions.

Mangudya said:

“Further to the advice in the 2019 Mid Term Monetary Policy Statement, the Bank (RBZ) has embarked on several initiatives to establish the Fintech agenda. The Bank is in the process of finalizing a regulatory sandbox framework. The framework will outline the qualification, application and evaluation criterion for entities to be admitted into the sandbox. The operationalisation of the framework will thus promote competition and efficiencies through innovation.”

RBZ now says banking institutions must upgrade their information communication technologies (ICTs) to be system consistent with developments in the ‘Fourth Industrial Revolution’. Additionally, banks are expected to explore new technologies and business models to enable them to compete in the digital age.

Statement Vague on Critical Aspects

However, the statement does not address the question of whether fintech ventures, such as privately issued cryptocurrencies, remain banned or not. There is still confusion on whether it is cryptocurrency trading that is banned or if it is the selling of tokens to the public that is banned.

The RBZ, which lacks a consistent and coherent position on this subject, appears to be reading from the same script as many of its peers from the continent. Several African central banks have previously shown a determined opposition towards privately issued tokens and the underlying blockchain technology.

Nevertheless, as the ignorance levels concerning this innovation continue to drop, so too has been the opposition. In fact, many central banks believe they can join in this space by creating their own cryptocurrencies, called central bank digital currencies (CBDCs).

Some are at very advanced stages of issuing these while others are still at the studying stage. On the African continent, the Egyptian central bank had indicated its intention to launch its own CBDC as well as Ghana and Mauritius. 

The RBZ has announced an intention to issue its own CBDC but a mere statement was enough to spark excitement among the country’s blockchain industry players.

Cautious Welcome

Cryptocurrency Token SalesBitcoinAfrica.io asked Zimbabweans involved in the country’s small blockchain space for their reaction to this latest announcement by the RBZ.

We reached out to Mike Makazhe, a young entrepreneur who says he is working to create a cryptocurrency for Zimbabweans.

Makazhe said: “I think financial institutions need to improve. It’s true most of their services are outdated and Pecunia (his crypto project) can help bring this (expected) to life.”

Another influential figure in Zimbabwe’s blockchain space, who did not wish to be identified, was less sanguine about this latest announcement.

He said: “The only thing I think about it is they are taking a dribble. They are happy with a broken system because it works in their favour.”

According to him, the RBZ is just putting on a show but lacks the will to actually implement some of the fintech proposals contained in the monetary policy.

The same sentiments were echoed by another crypto enthusiast who commented on this development in one crypto chat group on social media. The individual also noted that there was a lot of emphasis on banks and less on the private players that fall outside the RBZ’s regulatory reach.

These were also the sentiments shared by other individuals in the crypto community. They cautiously welcome this announcement but say the RBZ should be judged on implementation not the intention.

Zimbabwean institutions like the RBZ are notorious for taking their time to adopt technologies and systems that improve efficiency but are quick to implement anything that improves collection of revenues or the scarce foreign currency.

For example, it has taken the RBZ several years to capacitate a credit reference bureau, a body that can potentially end the country’s problem of high levels of non-performing loans. Some fear the same approach will be used on fintechs and the country will lag behind as the rest of the continent move ahead to adopt this innovation.

Zimbabwe’s small fintech industry expects the RBZ to issue more statements that clarify the country’s position as the year progresses. 

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Twitter CEO Thinks Africa Will Decide the Future of Bitcoin

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future of bitcoin

The CEO of microblogging platform Twitter, Jack Dorsey, believes that Bitcoin’s future will be decided in Africa. The celebrity CEO has stood behind the first cryptocurrency over the years saying that it’s the only digital currency that has stood the test of time, gone through boom and bust cycles, and handled fierce criticism only to stay tenacious.

One of the recent tweets of Twitter CEO says that although the currency is seeing increased adoption in European countries, the future of bitcoin is in Africa. His opinion came at the end of his tour of Ghana and Nigeria. His tweet read:

Mr. Dorsey is convinced that Africa will play a crucial role in deciding bitcoin’s future success and he’s willing to stand by his words by promoting the currency in the region through tours and meet-ups. Earlier, he participated in a meet up in Ethiopia where ideas were exchanged about promoting bitcoin and the related services.

What Will Drive the Future of Bitcoin in Africa?

So, what are the factors that will drive cryptocurrency in Africa? According to the Twitter CEO, one of the largest continents is at a crossroads where economic turmoil, poverty issues, and lack of infrastructure development and financial opportunities are pushing people toward cryptocurrencies, and bitcoin is one of them. They are placing their trust in cryptocurrencies and blockchain to bypass government corruption and incompetence.

It is really interesting to note that Dorsey isn’t alone in this. There are other crypto celebrities who share his opinion including Nate Hindman, who is the head of growth at Bancor. Mr. Hindman is quite confident in cryptocurrency’s future in the African countries as he says:

“In emerging markets like Africa, the shallow reach of traditional money systems means there’s less resistance to new financial technology.”

Another nod of agreement comes from Ray Youssef, CEO of Paxful, which is a peer-to-peer marketplace for trading bitcoin. He says that we’re only noticing the growth now because we haven’t been paying attention.

Africa hasn’t gotten big into bitcoin suddenly. In fact, they’ve been using the currency for many years and not only that, but they’ve taught us a lot about the real-world use cases of bitcoin.

However, this development hasn’t come without its own challenges as cryptocurrency laws in African countries can be quite restrictive, especially in Nigeria. Ray Youssef says:

“We found a way for them to export an asset, which is gift cards, as a way to go around financial restrictions. Now, bitcoin is flooding out of Nigeria and into other African countries because of the ambition of the Nigerian bitcoin community and Paxful.”

Paxful has seen immense growth with a total of three million subscribers and almost half of them come from African countries and the subscriber base is growing at a rapid pace. According to the recent stats, Nigeria, US, and Ghana made over 15 million trades in the last year, which is 65% year-on-year growth.

And it’s not just Paxful that is witnessing amazing growth in Africa. Binance also launched a new service by the name of Binance Uganda, where citizens can purchase bitcoin directly with their fiat currency. This step is helping the country to gain access to crypto markets, improve liquidity and increase the foothold of cryptocurrency trading in Africa. Belfrics is another exchange that’s offering its trading services in Tanzania, Nigeria, and Kenya.

Having said that, the growth of the cryptocurrency industry in the continent is also going to depend on the legislation and regulations around crypto trading. Just like online gambling, as in NCAAF college games betting, cryptocurrencies must be legislated and done responsibly, putting the trust into consumers.

If reigning governments don’t decide to be intrusive and keep the markets open, cryptocurrencies, including bitcoin, are going to play a massive role in the economic growth of African countries, and the prediction of Jack Dorsey may come true.

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