Crypto Africa Roundup: Why South Africans Buy Crypto, Zambian Authorities Shut Down Scam

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In our Crypto Africa Roundup, YouHash take a look at some recent developments on the fast-growing crypto continent.

Luno Sheds Light On Why South Africans Buy Cryptocurrencies

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Luno, a London based, South African founded company that provides Bitcoin exchange and wallet services to more than 2-million customers in 40 countries, recently published the results of a South African survey conducted by Kantar TNS entitled “Why do people buy cryptocurrencies?”

The survey was conducted with over 1,000 online respondents, and the report concedes that there is likely to be some bias since South Africans with internet access tend to be wealthier. Some of the key metrics from respondents are as follows:

69% 

are familiar with cryptocurrency

29%

already own cryptocurrency

53%

are interested in buying cryptocurrency

83%

of respondents who already own cryptocurrency see it as an investment

23%

use cryptocurrency for online transactions, only 12% transfer it to friends and family

74%

would like to pay with cryptocurrencies in a shop or online store

18%

declared no interest in owning cryptocurrency

An interesting feature of the report was the fact that “the uptake of cryptocurrencies has been marginally higher among younger South Africans but overall age has not proven a significant differentiator,” according to the report. This contrasts with the conventional wisdom that younger people are not just more “digitally aware’, but have an increased appetite for financial risk.

Zambian Authorities Arrest 3 In Apparent Cryptocurrency Scam

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Zambian authorities have arrested and released on bail 3 individuals, Hilda Raubenheimer, Orient Zekko, and Tapiwa Chirwa on suspicion of defrauding investors to the tune of $2,4-million in a high return scheme that promises to “create wealth with ease.”

According to the company brochure, HeritageCoin Resources claims to be tax compliant, and makes use of actuaries to “stay on top of the game”. These insights allowed the company to promise returns of 1.6% per day to investors provided they remained invested for 25 working days. Prospective investors were promised that their funds would be invested in cryptocurrencies, whereas according to authorities it is alleged that it was nothing more than a ‘money circulation scheme’.

The company’s error strewn brochure sets out the company target of moving 15% of Zambians above the poverty threshold in 15 months – 1% of the entire country taken out of poverty each month. Whilst that would be an impressive achievement for the government of any country, it would be an astonishing feat for a small company operating out of an office in a shopping mall in Lusaka.

According to the Zambian Drug Enforcement Commission’s PRO Chibu Tembo, the three have been arrested and charged with “providing banking business, financial business or financial services without a licence, conducting or participating in a money circulation scheme, obtaining money by false pretences and money laundering contrary to the laws of Zambia.”

Digital Asset Custodians to Require Licensing by Mauritius Regulator

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The Mauritius Financial Services Commission (FSC) has recently announced its intention to regulate the custodianship of digital assets on behalf of third parties, as it claims the existing legislation does not sufficiently cater for the asset class.

The FSC is in the process of awaiting feedback from the public, industry and interested parties in relation to a draft consultation paper entitled, “Regulatory Framework for the Custodian Services (Digital Asset) dated 5 November 2018.

The licenses currently issued by the FSC for custodians traditional financial services providers are inadequate insofar as the requirements for the safekeeping of crypto assets, whereas the digital asset license is specifically designed to ensure compliance with current regulations.

The digital asset licence will recognise the holder as a financial institutions under the Financial Intelligence and Anti-Money Laundering Act. In addition, crypto business will have to hold unencumbered reserves of $15,000, have offices in the country, and have permanent representatives answerable to the FSC. In terms of ownership, at least on director should be a local resident.

Getting to Know Africa’s Blockchain Movers and Shakers

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Monica Singer is the South Africa Lead for ConsenSys, an international company that focuses on building blockchain applications on the Ethereum platform. She is a powerful and credible voice for blockchain and believes that few industries will be untouched by blockchain in the future.

A Chartered Accountant (South Africa) and Fellow of the Institute of Directors, Ms Singer was the first CEO of South Africa’s Central Securities Depository, Strate (Pty)Ltd, which she set up in 1998. In 2017 and after heading Strate for 18 years, Ms Singer left with the intention of starting her own blockchain consultancy, but ended up accepting an offer from founder Joseph Lubin to build ConsenSys’s South African business.

With her passion for blockchain and powerful business experience, Ms Singer is a convincing and credible force on the continent in replacing outdated and vulnerable systems and processes with the smart contracts and blockchain solutions.