Crypto in Africa: Remittance issues, fraud, and crypto popularity

Crypto shows great promise in solving the remittance issues of most African countries. Startups are taking initiatives to help Africans send and receive money at the lowest possible cost.

Two arrested for operating illegal crypto operations

Two people in Sierra Leone were detained for the alleged activity of illegal financial transaction in the country.

According to local reports, Sierra Leone officials have detained two people believed to be Nigerian nationals. The two are alleged to have been running a crypto-based operation that intended to defraud the public.

While addressing the public during a joint press conference, the Central Bank of Sierra Leone (BSL) and the Sierra Leone Police stated that a preliminary investigation showed that some unsuspecting investors have already parted with an unspecified amount of funds.

Berestford Taylor, Assistant Director of the Secretaries Department of the BSL, said none of the institutions were registered with the central bank as required by law, and therefore they were operating illegally.

“The Banking Act, 2011 and the Other Financial Services Act, 2001 provide that no person shall engage in the banking business, take deposits or issue financial products to the general public unless that person holds a valid license issued by the Bank of Sierra Leone.”

Authorities have already discovered two companies. These operations were not registered with the authorities. In the first company, the manager and secretary of one of the illegal companies named Rolling Pont Network Limited were arrested after authorities had conducted three separate raids between April and 10 in different locations in the capital of Sierra Leone.

From the raids, authorities recovered Le96.5 million ($11,138), and many documents include membership forms, a list of names of the contributors and receipt books.

In the second company, Wealth Gate Solution Company, police Superintendent Martin Colya, head of the Anti-Fraud Unit at the Criminal Investigation Department (CID), said that the manager and staff were on the run.

Bitpeza want to solve remittance in Africa

Bitpeza, a crypto exchange intends to solve the remittance situation in Africa. The platform, which allows users to buy bitcoin with naira using naira debit cards and enables users to exchange their bitcoin to naira, which is credited to their local naira bank accounts instantly, wants to use cryptocurrency to solve remittance problem in Africa.

The cost of sending money in Africa is very costly. According to the World Bank, Remittances to sub-Saharan Africa grew to $37.8 billion in 2017. On average, to send $200 to and from a country in the region costs almost $19 in the first quarter of 2018. This is more than 20% higher than the charge for remittance to any other region.

Japhet Johnson, CTO & Co-founder of Bitpeza stated:

“We are subsequently going to include other altcoins that have verified, reliable and sustainable projects/purposes such as Ethereum because we placed utmost priority on building a healthy and risk-free platform for users.”

Bitpeza started in 2016 November as NairaBitcoins. The startup focuses on educating users on blockchain and cryptocurrencies. Bitpeza also helps users under how best they can use these technologies to send money to family, friends or other people in Africa and other parts of the world. The platform has various features including Low charges (less than 5%) on all transactions, real-time customer care service and Real-time, instant naira payments and purchase of bitcoin. Reportedly, it plans to add more features in the future.

Nigeria warms up to cryptocurrency

Despite being the most populated country in Africa, Nigeria has had slow crypto adoption. However, according to Google Trends, Nigeria has searched “bitcoin” the most.

Crypto has gained more acceptance especially for the young population in the country, who engage in importation, blogging and freelancing deals. Crypto is gaining more interest as its providing many with a payments solution for the remittance crisis in the country.

Cryptocurrencies are also gaining interest among the unemployed community who are looking for quick ways to get money.

Crypto businesses are also emerging all around the country. In 2018, Kubix launched the first crypto exchange in the country. Pundi X, an Indonesian payment and blockchain company introduces point of sale devices to help facilitate crypto payments.