Emerging Onchain This Week #5
Well hello again crypto friend 👋 welcome back! This week we bring you African crypto updates & data from countries including Tanzania, Nigeria, Mozambique and South Africa.
Ecosystem
-Binance Nigeria under fire from the Nigerian SEC on its legality
According to the circular published on the 9th of June 2023 by the Nigerian Securities and Exchange Commission, “Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal.” Binance Nigeria has been requested by the Nigerian SEC to seize their solicitation of Nigerian investors, that is they can no longer explicitly encourage Nigerian investors to use any of their platforms, it does not however demand the halting of all operations.
In a similar brand of regulation, former President Muhammad Buhari signed the Finance Act 2023 into law on 28 May 2023 in a bid to “generate revenue and regulate the digital asset market"; effective immediately. It introduced a 10% tax on digital asset capital gains. The digital assets included were cryptocurrencies, stablecoins, and non-fungible tokens (NFTs). Nigeria joins Kenya which recently announced plans to tax income generated by digital assets by 3%.
-Crypto firms operating in South Africa will need to apply for a licence to operate
As of 1 June, the Financial Sector Conduct Authority (FSCA) of South Africa requires that all crypto firms looking to operate in the country apply for a licence. Should a firm not register or continue to operate beyond the stipulated deadline of November 2023 without registration, they can face a fine of up to 10 million ZAR ($534,000) and/or 10 years in prison. Once an application has been filed, a firm that can prove compliance with the existing general code of conduct can continue to operate while it awaits an approval.
South Africa’s crypto ecosystem is one of open advocacy, however this new requirement has not been received all too well, with some claiming it to be too short an application period. It is worth noting that according to the declaration, non-fungible token providers, mining node & node operators are currently exempted from this requirement.
-NITDA to collaborate with SIBAN to accelerate Blockchain adoption in Nigeria
In May 2023, Nigeria launched its official Blockchain policy showing its dedication towards embracing Blockchain Technology.
Against this backdrop, SIBAN, the Blockchain association in Nigeria led by Obinna Iwuno, met with Kashifu Inuwa Abdullahi, CCIE, the head of The National Information Technology Development Agency (NITDA), to discuss possible ways of strategic partnerships. During the meeting, both parties shared ideas on how best to actualise the goals of the Blockchain policy.
-White Bit enters the Nigerian market
White Bit, the world's second most secure crypto exchange and a leading crypto Exchange in Europe, has announced its intentions to expand into Nigeria.
CEO Volodymyr Nosov aptly said, ‘opening a representative office in Nigeria is a logical step in the development of not only WhiteBIT but the cryptocurrency community as a whole.’ It is believed that White Bit's expansion to Nigeria will be beneficial to the crypto space within Nigeria, particularly given the current state of crypto in the country.
Product Launches
-World Mobile eyes a full Africa rollout after field tests & a launch in Zanzibar
World Mobile, the decentralised wireless network operator, officially launched in May in Tanzania’s Zanzibar, where it is said that per day, 16,000+ users receive wireless connectivity from 300 AirNodes. Field tests have been completed in Kenya, Nigeria and Mozambique; the results validate the scalability and feasibility of a full Africa rollout.
World Mobile offers affordable & reliable internet access to traditionally underserved remote and rural areas. Founded in 2018 by current UK based CEO Micky Watkins, their mission is to connect everyone, everywhere while advocating for economic freedom and dignity, through the use of blockchain and the sharing economy.
-Fruits Eco Blockchain project set to launch the Fruits Gold Exchange Global in Tanzania.
It is not always transparent where your money ends up when you donate it, this dilemma goes both ways, where accessing the donations can be just as much a herculean task as tracing it.
To address these challenges, the Fruits Eco-Blockchain Project is launching a local crypto exchanges, starting with Tanzania. The Fruits Gold Exchange Global (FGXG), crypto exchange slated to launch in June, aims to enable the conversion of donations received through the Fruits ecosystem into local currency, allowing people in need to benefit from crypto donations better ease of access. In addition, the exchange will also serve as a fiat on-ramp, allowing users to swap local currency for crypto assets.
-The SEC has started its Battle of control over crypto
Binance and Coinbase, the biggest crypto exchanges in the world and in the US respectively, have been sued by the American Securities and Exchange Commission (SEC) for violating federal securities laws. The suit against Binance alleges that they offered unregistered securities, commingled customer funds & misrepresenting trading controls and oversight on the Binance.US platform among other things. On Coinbase, the allegations claim that the exchange traded in unregistered securities, this is mainly in connection with its staking-as-a-service program.
It is possible that like the Ripple case, both these suits could also take years to conclude. While that unfolds, Robinhood is ending support of at least 3 tokens affected in the suits while exchange and clearinghouse Cboe Global Markets was officially approved by the US Commodity Futures Trading Commission (CFTC) to launch leveraged derivatives.
-Hong Kong finalises its licensing regime for virtual assets
In late May 2023, Hong Kong finalised its new licensing guideline geared towards making them the new leading global crypto hub. The Virtual Asset Trading Platform Operators Guidelines became effective on the 1st of June 2023, included are guidelines on the safe custody of assets, the segregation of client assets, the avoidance of conflicts of interest & cybersecurity standards and the expected requirements of licensed trading platforms; more security measures are expected to follow.
These new rules allow licensed & Securities and Futures Commission (SFC) compliant Hong Kong-based cryptocurrency trading platforms to offer services where retail investors are able to trade some of the top cryptocurrencies including Bitcoin & Ethereum to name a few others.
According to this report by Chainalysis, Africa contains some of the most well-developed cryptocurrency markets of any region.
Even though it accounts for the least cryptocurrency transaction volume of any region, with $100.6 billion in on-chain volume received between July 2021 and June 2022, Sub-Saharan Africa represents 2% of global activity, and 16% growth over the year prior.
Here is a short list of some of the resources we are reading, listening to or watching to catch up on the emerging trends affecting the crypto space.
McKinsey’s ‘Reimagining economic growth in Africa’ report
Coindesk Market’s Daily Episode on Why the biggest emerging markets are turning to Crypto
Reimagining Digital ID insight report by the World Economic Forum
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