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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.

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New Ethereum Wallet Argent Makes DeFi Accessible for Everyone

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Argent

The DeFi market is booming. The total amount of crypto correctly locked in DeFi protocols recently exceeded $2.4 billion. More and more crypto investors are turning to DeFi DApps to earn interest on their cryptoassets. However, DeFi is still too complicated for the average non-techy investor to get involved. London-headquartered Ethereum wallet provider, Argent, wants to change that. 

BitcoinAfrica.io reached out to Argent co-founder and CEO, Itamar Lesuisse, to learn more about Argent and the DeFi market. 

What is Argent? 

ArgentArgent is a user-friendly Ethereum wallet that enables you to store, send, and receive, borrow, earn interest, and invest. Effectively, it is a one-stop-shop for all things DeFi at your fingertips.  

Unlike most Ethereum wallets, which focus purely on storing, sending, and receiving ETH and ERC-20 tokens, Argent goes a step further and provides easy access to an array of DeFi DApps

“Argent’s mission is to empower everyone to control and prosper from their digital assets and identity. Everyone should have equal access to economic opportunity and crypto can be a critical enabler of this.” Argent CEO, Itamar Lesuisse, told BitcoinAfrica.io 

“To this end, we’ve built the first non-custodial wallet with the ease of use and security of the best new bank apps. You can earn interest and invest in a tap via DeFi DApps; protect yourself with daily transfer limits, whitelisted contacts, and easy locking; and you never need a seed phrase,” he added. 

Argent is available for Android and iOS and has a very smooth onboarding process. No mnemonic phrase to write down and no wallet.dat file to back up. You sign up a username and passcode, and you provide an email address and a phone number. That’s it. 

To fund your wallet, you can either transfer ETH or ERC20 tokens or you can purchase them in-app via Apply Pay, bank card, or a bank transfer. This is made possible through a partnership with MoonPay.

Arguably, the best feature of Argent, however, is that it provides direct access to DeFi protocols in an extremely user-friendly way. 

DeFi Made Easy

Argent enables you to use the digital assets held in the wallet to invest in DeFi protocols with the click on a button. There is no need to sign up for each platform. You simply access the “Invest” section and have immediate access to leading DeFi protocols, such as Aave, Compound, PoolTogether, and Uniswap. 

Even first-time crypto users can get involved in DeFi. All it takes it choosing the asset you want to invest, how much of it, and in which protocol you would like to place it. 

For example, you could purchase $1,000 worth of USDC and place it in Compound to earn 1.75% APY. That would likely be more than the interest any bank would pay you on US dollars. 

Moreover, Argent users can invest in TokenSets, take part in PoolTogether, or provide in a Uniswap liquidity pool. 

What’s Next for Argent?

Argent launched the public version of its app in May 2020 and has already made waves in the Etherem community. But this is only the beginning. 

“In the last few months we’ve launched our DeFi Hub (which provides one-tap access to the best DeFi DApps, like Compound, Aave and TokenSet), and also dark mode,” Lesuisse told BitcoinAfrica.io. 

“Next, we’re focused on making it easy for anyone to access a DApp, even if they don’t have a crypto wallet. Our SDK for DApp developers will mean people can onboard to a DApp without a browser extension or seed phrase. They can easily buy crypto with fiat, and they can use the DApp without having to hold ETH. We hope it significantly lowers the barriers to DApp adoption,” he added.

The Future of DeFi

Currently, the DeFi market is a playground for crypto traders and the Ethereum community. But the market is growing as it is receiving more media attention as well as an influx of funds. 

Lesuisse and his team envision that the DeFi market will become more accessible and user-friendly in the coming years. And that it will open it to non-crypto investors as well. 

“Over the next five years, we hope it becomes even easier to use, safer, and, most importantly, develops more use cases that are compelling to a wider audience. We hope by solving many of the usability issues that DApps can focus on building those use cases, taking DeFi from a niche to a mainstream topic.”   

The DeFi market is still in its infancy. Vulnerabilities and bugs in already operational protocols will likely continue to plague DeFi as part of its growing pains. But that doesn’t change the fact that DeFi has the potential to become the fintech innovation that will finally take power away from banks and into the hands of the people.

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Top 7 Most Popular Methods for Buying Bitcoin in Africa

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Buying Bitcoin in Africa

Buying bitcoin in Africa is possible with several easily accessible payment methods. This guide will look at seven of the most popular methods that Africans are using to purchase bitcoin.

Buying Bitcoin in Africa with Mobile Money

Sub-Saharan Africa is the leading mobile money market in the world. According to a GSMA report, the mobile money transaction value in Sub-Saharan Africa was $456.3 billion in 2019.

Some of the top mobile money providers on the continent are telecom companies like Safaricom, MTN, Econet, Airtel, Orange, Telekom, and Inwi. These companies offer M-Pesa, MTN Mobile Money, EcoCash, Airtel Money, Orange Money, T-Kash, and Inwi Money, respectively.

Since mobile money platforms are easily accessible in most parts of Africa, crypto exchanges and P2P marketplaces have adopted them as payment methods. For example, Paxful supports payments via all of the above mobile money platforms.

The acceptance of mobile money payments on crypto platforms means that buyers can use their local currencies to buy bitcoin.

To buy bitcoin via mobile money, all you need is the seller’s phone number and name. In most cases, the seller should be a subscriber of the mobile money platform you are using to make payment.

Buying Bitcoin in Africa via Bank Transfer

Bank transfers are another popular method of buying bitcoin in Africa. While the number of mobile money subscribers in Africa is increasing rapidly, bank accounts are still relevant. According to data from Statista, 298 million adults in Africa had a bank account in 2017. Therefore, it makes sense that crypto platforms would support bank transfers as well.

Buying bitcoin via a bank transfer on Paxful, for instance, is as easy as transferring money to the bank account details the seller gives you.

Buying Bitcoin in Africa Through Cash in-Person

Paying in cash is also a popular method for buying bitcoin in Africa. You can use this method when you are meeting with a seller or visiting the offices of an exchange platform. Paying in cash is a safer method of purchasing bitcoin as long as you ask to see the BTC first. It is even safer to receive the bitcoin first before handing out the payment.

If you are uncomfortable making bitcoin transactions on a P2P platform or over the phone, you should opt to pay in cash during a face-to-face meeting.

Paxful offers a location filter that you can use to find the most suitable cash in-person deal near you.

Pay With PayPal

buy bitcoin with PayPal instantlyPayPal is a global payment method that is accessible by most people across the globe, including Africans. That is why a few crypto platforms like Paxful allow payments through PayPal.

However, many exchanges do not allow PayPal payments because of chargebacks. If you pay for BTC through PayPal, then report a few days later that you did not receive the bitcoin even though you did, PayPal is likely to favour you, the buyer. This means you will get a refund and keep the bitcoin. Since it is difficult to connect the BTC to the original owner, the seller has no evidence to make his case. Therefore, to avoid fraud, most crypto exchanges do not accept PayPal payments.

Nevertheless, platforms that accept this method of payment require buyers to undertake several actions to protect the seller. For example, Paxful advises sellers to ask buyers to write some words on a piece of paper and take a selfie with it. Sellers can use this photo as evidence in case of a dispute. Sellers could also ask buyers to provide an ID, a billing address, and a social media account link to prove their identities.

Pay Via Chipper Cash

Chipper Cash is a cross-border money transfer option that allows users to cash-in from their mobile money wallets. Once you top-up your Chipper wallet, you can send money for free to anyone in Ghana, Nigeria, Uganda, Rwanda, Tanzania, Uganda, and Kenya. Chipper plans to expand this service to more African countries.

The cross-border nature of Chipper Cash makes it ideal for buying bitcoin in Africa. So, if you are a Kenyan buyer on Paxful, you can purchase bitcoin from a seller in Ghana and pay via Chipper Cash. The platform uses live exchange rates to process cross-border transactions.

Exchange Other Digital Currencies for BTC

It is possible to exchange one digital currency for another on exchanges and P2P marketplaces. For example, you can exchange ETH on Paxful with a trader accepting this digital currency for selling BTC.

Trading one digital currency for another is suitable if you hold several digital currencies in your wallet. Additionally, you can use this method to make a profit and to accumulate your bitcoin holdings.

Exchange Gift Cards for Bitcoin

If you have an unused gift card that you received during Christmas, you can use it to buy bitcoin on a platform like Paxful. Alternatively, you can buy a gift card with cash then use it to buy bitcoin.

When buying bitcoin on Paxful with an Amazon gift card, for instance, you should take a high-resolution picture showing the codes on the physical card. Additionally, you should take a photo of the receipt showing you bought the gift card in cash.

It is easy to purchase bitcoin with a gift card, especially if you have one lying around unused or with a balance. Some of the gift cards that you can trade for bitcoin on Paxful include Amazon, Apple, Sephora, American Express, Asos, and Forever 21.

Some Africans abroad are using gift cards to send money to their relatives back home. To illustrate, a man in London sends his wife back in Nigeria an Amazon gift card worth $200. The wife then sells the gift card for bitcoin, and perhaps make a small profit. She then sells the bitcoin for more profit and cashes out in Naira.

Now that you know the most popular methods of buying bitcoin in Africa, you can learn how to trade bitcoin safely and securely in this guide.

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Naira Devaluation: How Nigerians Can Protect Themselves With Bitcoin

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Naira devaluation
Hillato / CC BY-SA

In July 2020, the Central Bank of Nigeria further devalued the Naira by about 5.5 percent to 380 Naira to the dollar. Previously, the regulator had revised the exchange rate from 307 Naira to the dollar to 360 in March. The reason for the devaluation was the decrease in oil prices, USD shortages, and increasing pressure from external lenders.

In this guide, you will find out what the effects of the Naira devaluation are and how you can protect yourself.

Naira Devaluation

Currency devaluation is a tactic that central banks use to increase fiscal revenues, reduce debt burdens, reduce trade deficits, and boost exports.

With regard to the Naira devaluation, experts believe that this move will boost fiscal revenues and send a positive signal to lenders. However, they are doubtful that devaluation will control the foreign exchange pressures that the country is facing. With a decline in oil prices and remittance flows, foreign currency shortages could persist.

Oil is the biggest foreign exchange generator in the West African nation. Therefore, a plunge in prices and an ongoing pandemic could sink the country into a massive recession.

Nigeria’s Multiple Exchange Rates

Interestingly, Nigeria operates several exchange rates, a situation that has attracted criticism from economists. For instance, the country has a black market exchange rate, where the Naira trades at more than 450 to the dollar.

Furthermore, the country has interbank rates, rates for hard currency buyers, rates for Muslims making a pilgrimage to Mecca, and rates for Nigerians that want dollars for school fees abroad.

That said, the central bank plans to unify the rates, a move that could increase foreign investment and clarity.

The Effects of Naira Devaluation

NGN devaluation

While currency devaluation provides several positive effects, it also results in negative effects. For example, investors that have bought shares and bonds on the Nigerian financial market could have trouble repatriating their capital if the Naira continues losing value.

Moreover, listed companies with foreign investors are likely to face several challenges. For instance, divestments could dip the stock market value of these companies. Also, companies whose operating expenses are expressed in dollars could experience an increase in foreign exchange losses.

Another consequence of devaluing the Naira is inflation. Inflation can affect your savings, resulting in a value decline over time. Although your savings in the bank could earn a higher interest, the interest rate might not be enough to offset the loss from inflation. Inflation will also affect your purchasing power. As a result, your ability to buy items in the future will decline, especially if your income remains fixed.

Additionally, inflation will affect your investments. Your earnings from an investment during inflation will depend on the type of investment you have made. For instance, precious metals typically perform well during inflation. However, it will cost you more to purchase them.

What is the Solution to the Naira Devaluation?

legitimate bitcoin doublerWith your investments and savings at risk, you should consider a non-conventional investment option like bitcoin. Bitcoin is a suitable investment option because it is a store of value for several reasons.

  • First, no one can confiscate the bitcoin you hold. When you own bitcoin, you hold 100 percent ownership rights, and no one can take it away from you. However, other assets like gold do not have the same feature. In fact, governments can ban their citizens from holding gold. Also, the Chinese government has tried to block access to bitcoin several times but has failed to make an impact. That means that bitcoin is difficult to censor.
  • Second, it is easy to move. It seems pointless to own an asset that you cannot transfer as you please. Fortunately, it is easy to send and receive bitcoin, anytime and anywhere. All you need is a computer or smartphone and an internet connection.
  • Third, anyone can buy bitcoin, whatever its price. The reason for this is that you can buy bitcoin in smaller units. Therefore, with as little as $10, you can become a bitcoin owner.
  • Fourth, bitcoin has been growing since its launch, and this trend is likely to continue. The growth is not only price-related but also support-related. More and more people are taking an interest in bitcoin. For example, there were more than 42 million bitcoin wallets by December 2019.
  • Fifth, the bitcoin supply is limited, giving it more value. Any asset that is a store of value should have a limited supply.
  • Lastly, you can hold bitcoin for years and cash out at a huge profit. Many people bought bitcoin when it was extremely cheap. If they decided to sell now, they would make a huge profit. Therefore, it is clear so far that holding bitcoin as a long-term investment is rewarding.

Win 4,000,000 NGN Worth of Bitcoin

Paxful GiveawayCrypto companies are often running campaigns to reward their users. Currently, Paxful has set aside four million Naira in bitcoin to reward traders from Nigeria.

The campaign started yesterday, 21 August 2020, and will end on 31 August 2020 at 11.59 PM.

Winning a reward is simple. If you do not have a Paxful account, create one, verify your ID, and make one trade. 200 new traders that do this will win 5,000 Naira in bitcoin.

Furthermore, Paxful will reward 30,000 Naira in BTC to the top three traders that conduct the highest number of trades, the highest volume of trades, and the most number of trades in Naira. That means that in each category, three traders will get 30,000 Naira in bitcoin. As if that is not enough, Paxful will select one Nigerian trader at random to win 30,000 Naira in bitcoin.

The winners of this giveaway could choose to trade the bitcoin they win for a profit, giving them a chance to earn an extra income. With an economic crisis on the horizon, an extra income is a great opportunity for all Nigerians. Therefore, buying and trading bitcoin is a possible way to protect yourself from the impact of the Naira devaluation.

Sign up to Paxful here to take part in the Bitcoin Giveaway!

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