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Binance And Crypto.com Publish Proof-of-Reserve Audits Conducted By Global Auditor Mazars Group

As promised by exchange executives after the FTX debacle, two very sizable cryptocurrency exchanges this week delivered proof-of-reserves (POR) documentation. According to trade volume, Binance, the largest cryptocurrency exchange in the world, has made a thorough analysis of the assets held on the BTC, BTCB, and BBTC networks as well as the BNB, Ethereum, and Binance Smart Chain networks available on the website of Mazars Group.

The audit by Mazars was performed on November 22, 2022, at Bitcoin block height of 764,327. According to the report, assets are backed by collateralized reserves 101% of the time. “At the time of assessment, Mazars observed Binance controlled in-scope assets in excess of 100% of their total platform liabilities,” the Mazars report asserts. “The collateralization ratio takes into account in-scope-assets lent through the margin and loans service offers which are collateralized by out-of-scope assets. The Merkle Root was compiled by hashing all client accounts into a single output,” the Mazars audit adds.

Mazars’ audit of Binance also states that the attestation included accounting for “total liabilities.” At the end of Nov. 2022, after Binance provided POR addresses, Kraken’s Jesse Powell criticized the proof and said that the “statement of assets is pointless without liabilities.” Powell has shared his two cents about the latest audit from Binance as well and lambasted the Binance POR again on Dec. 8.

In response to Binance publishing, the results of its POR audit examined by Mazars Group, the cryptocurrency trading platform Crypto.com published a press release announcing the results of its POR audit, which was also carried out by Mazars. According to the statement from the business, “Mazars Group compared the assets held in [onchain] addresses proven to be controlled by Crypto.com with customer balances through an auditor-overseen live query of a production database as of December 7, 2022, 00:00:00 UTC.”

Existing customers can confirm their assets on the platform, according to Crypto.com. The full Crypto.com audit conducted by Mazars can be found here (https://crypto.com/document/proof-of-reserves) “Our report is solely for the purposes of offering Crypto.com’s customers additional transparency and reassurance that their in-scope assets are fully reserved, exist on the blockchain(s), and are under the control of Crypto.com at the below mentioned reporting date,” the Mazars audit details.

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Opinions

Jeffrey Wu Explains How Nigeria Can Boost Blockchain For Cashless Growth

As the emergence of Blockchain accelerates digital payments in Nigeria with the introduction of central bank digital currencies, regulation is a critical infrastructural instrument in Nigeria for seamless implementation.

On Monday, Sam Lee, creator of Blockchain Center, and Jeffrey Wu, CEO of Actionable Strategies, revealed this during the 2nd Edition of the Africa Cashless Payment Conference, which Nairametrics attended.

They stated that the emphasis should be on driving adoption, which must be promoted in all regions for all sorts of products.

Sam Lee argued that the digitalization of money is unavoidable and more efficient and that Blockchain fosters confidence and transparency, with legislative hurdles to follow to avoid confrontations.

He said, “In six years ( 2014-2020) growth of digital payment in China helped China move into mobile infrastructure ( Alipay, WeChatPay) and a key pillar lifting people out of poverty and connecting them to global opportunities.”

He added that big data uses AI to improve insights gotten from digital purchases, citing that,

“Blockchain enables payments Infrastructure for trust, transparency, and efficiency. This can be done through better regulation, as the focus needs to be on driving adoption, which has to be driven in all areas for all types of merchandise.

“Blockchain accelerates digital payment and needs regulation as a key infrastructure tool such as the Nigerian E- naira.”

Jeffrey Wu stated that digital currencies are enablers that make the technology needed for it viable.

“Digital application can enable Africa from the most unbanked to rapid economic growth for a huge number of people. Achieving critical mass adoption is just as important as the technology itself. Platform development must be designed to current systems but need better long-term adoption for technology uses.

He said investment flows freely to opportunities that are viable and provide realistic returns identified and managed, citing that focusing on population won’t get investments, as the focus needs to be on driving adoption, which has to be driven in all areas for all types of merchant

“Government entities must also reduce friction adoption and boost adoption that will help private stakeholders towards a cashless society adoption,” he said.

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Business

Argentina Organizes National Blockchain Committee to Implement State-Level Strategy

More and more Governments are investigating how the use of blockchain technology might improve some of their public operations. Argentina just published its blockchain national guidelines.

The paper, which was released on December 7, also establishes a national blockchain committee, which will be responsible for “acting as an interlocutor in the local blockchain ecosystem, promoting the interoperability of blockchain technology and good governance.”

The Public Innovation Secretariat and other state agencies will form the group, which will create blockchain-based public policy and technology solutions. However, the additional organizations requested to serve on the committee are not included in the framework.

The Government framework outlines many applications for blockchain technology in supporting state-exclusive operations. Given the scale and extent of various governmental systems, the first area where it is expected to be useful is auditing. Blockchain is described as a component that will serve two purposes in this regard: assisting individuals in understanding how the state invests public cash and centralizing all public activities into a single framework.

The second area concerns citizen identity. The Argentine government believes that blockchain technology might help with identifying operations by preventing forgeries of IDs and other government papers. Creating a system based on blockchain would provide third parties with simple methods of verifying.

There are already projects using blockchain for this purpose. The city of Buenos Aires is now building a system called Tangoid, which is expected to be operational in January as part of a digitalization drive. The city will also host Ethereum nodes as part of an effort to better understand the cryptocurrency’s inner workings for regulatory purposes.

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Opinions

Paxful CEO emphasizes his support for bitcoin education at the Africa Bitcoin Conference

The founder of the P2P trading platform Paxful, Ray Youssef, stated at the Africa Bitcoin Conference that he is tired of dealing with unscrupulous cryptocurrency schemes. According to Youssef, this year has seen a lot of malicious actors invading the crypto space and hence lowering the trust among the community. He took to the stage shedding light on the fact that none of such schemes are associated with Bitcoin.

He, therefore, emphasized that his organization takes BTC education seriously and thinks it is important to tackle Ponzi schemes.

In addition, he was there promoting Paxful and acquainting the attendees with the pros of using the platform. He noted that their company allows genuine P2P transactions and are far away from malicious practices and investments. 

According to a Federal Trade Commission (FTC) report issued in June 2022, over 46,000 people had to face over $1 Billion in financial damages due to cryptocurrency frauds since 2021. Majority of the victims losing their money said that it all started with a post, advertisement, or a DM on some social media platform. Meta’s family of social media apps including Instagram, Facebook, and Whatsapp accounts for 67% of the frauds.

The crypto sector is increasingly becoming a breeding ground for hackers too. According to Coin republic, Axie Infinity’s Ronin Bridge hack remains the biggest attack of the year. North Korea-based Lazarus Group was identified as the network’s exploiter. Sky Mavis, the creator of the game, initiated a temporary change that led to reduced security in the ecosystem. The attackers hit the iron while it was hot and squeezed $625 Million from the network.

The US Department of Justice announced in November that it had detained two Estonian nationals in connection with a $575 million cryptocurrency and money laundering operation. According to the authorities, the offenders persuaded investors to obtain mining service contracts and to make investments in digital asset banks.

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Business

Spain’s Central Bank Calls For Proposals for Wholesale CBDC Project

The Bank of Spain has recently revealed it will launch its own experimental program with a wholesale CBDC. The bank announced this through a document that was issued on December 5. The document also announces this digital token program and explains that the institution is seeking the collaboration of companies in the industry that will be able to formulate their proposals on this matter.

The institution made it clear that there is no connection between this work and the current research into the digital euro being done by the European Union. The goal of this new initiative is to determine whether utilizing such a currency is feasible and to evaluate any potential benefits to the settlement process.

The bank will accept proposals up until January 31. After that date, the bank will begin considering each proposal for potential selection.

The selected proposals will have to be executed in a period of no more than nine months, starting on April 3, with their completion estimated on December 29, 2023. However, the bank will be able to issue an extension depending on several factors, according to the selection process document.

While most of the experiments and trials being run today in the CBDC field involve the figure of a universal purpose currency, the Bank of Spain is also interested in a wholesale currency, directed to aid in the settlement of financial transactions between banking institutions.

The program defined in the public document that describes the experiments gives three key tasks that must be completed: the simulation of transactions using the wholesale CBDC, experimentation with the combination of the CBDC and the liquidation of financial assets, and the analysis of the possible advantages and drawbacks derived from the implementation of a wholesale CBDC when compared to traditional methods.

The Bank of Spain did not offer more details about the future of a hypothetical wholesale currency in Spain, or about the intention of implementing a similar currency for interbank transactions.

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Business

Central Bank of Nigeria enforces ATM withdrawal limits to encourage usage of the eNaira

In an effort to advance its policy of a cashless Nigeria and promote the usage of the eNaira, the digital currency issued by the central bank of Nigeria, the country has significantly reduced the amount of cash that individuals and businesses can withdraw (CBDC).

The Central Bank of Nigeria (CBN) issued the directive to financial businesses in a circular released on 6th December, noting that individuals and businesses would now be limited to withdrawing $45 (20,000 Nigerian nairas) per day and $225 (100,000 nairas) per week from ATMs.

According to the circular, individuals and businesses will also be limited to withdrawing $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively, at banks per week, with individuals hit with a 5% fee and businesses with a 10% fee for amounts above those limits.

In addition, the maximum cash withdrawal via point-of-sale terminals is also capped at $45 (20,000 nairas) per day. 

Announcing the changes, the Director of Banking Supervision Haruna Mustafa emphasized,

“Customers should be encouraged to use alternative channels such as internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc. to conduct their banking transactions.”

The restrictions are cumulative for each withdrawal, so someone who withdraws $45 from an ATM on the same day and then tries to withdraw money from a bank will be charged a 5% service fee. Prior to the announcement, the daily cash withdrawal cap for individuals was $338 (150,000 naira) and for enterprises, $1,128 (500,000 naira).

Adoption rates for eNaira have been low since its launch on October 25, 2021. As reported recently, the Central Bank of Nigeria has struggled to convince its citizens to use the CBDC, with less than 0.5% of the population reported having used the eNaira as of October 25, a year from its launch.

Nigeria implemented its “cash-less” policy in 2012 with the justification that doing so would improve the efficiency of its payment system, lower the cost of banking services, and increase the efficacy of its monetary policy.

Godwin Emefiele, the Governor of Nigeria’s central bank, announced on October 26 that the bank will be reissuing new banknotes in an effort to promote the transition to digital payments because 85% of all Naira in circulation was stored outside of banks.

Nigeria is one of 11 nations that have fully implemented a CBDC, according to a tracker created by the American think tank Atlantic Council. Another 15 nations have started experimental projects, and India is expected to follow soon after.

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Business

Strike partners with Bitnob to enable instant payments to Africa

Digital payments platform built on Bitcoin’s Lightning Network, Strike has announced its partnership with African payments platform Bitnob to enable instant payments to Africa. Through the partnership, Strike is launching a feature enabling instant, low-cost payments to Africa. According to the press statement, Strike’s Send Globally is available to all Strike users in the U.S. starting on 6th December, with initial coverage for Nigeria, Kenya, and Ghana.

According to Strike, the “Send Globally” feature improves the speed, affordability, and ease of payments to Africa, including in countries that have fewer available options for cross-border money transfers. Using the Lightning rails under the hood, Strike’s Send Globally feature provides users in the U.S. with a cheaper, faster, and more innovative way to make payments to Africa with no transaction fees. Payments are instantly converted into naira, cedi, or shillings, and deposited directly into a recipient’s bank, mobile money, or Bitnob account. 

Commenting on the innovation, Jack Mallers, Founder and CEO of Strike stated, “High fees, slow settlement, and lack of innovation in cross-border payments have negatively impacted the developing world. With exorbitant fees to transfer funds in and out of Africa and incumbent providers halting services, payments companies are struggling to operate in Africa and people cannot send money home to their family members. Strike offers an opportunity for people to transfer their US dollars easily and instantly across borders”

Bernard Parah, Founder, and CEO of Bitnob also commented, “The current financial system isn’t set up in a way that ensures equal access for people and institutions from Africa. What we have built reduces the pressure on our financial institutions in sourcing USD liquidity. People can now easily exchange value from the US to people in Africa in the cheapest way possible. We can now save people sending money back home to Africa billions of USD in transfer fees.”

Solving cross-border payments into Africa using Bitcoin would be a major boost to local economies. In Nigeria alone, $17.2 billion was sent in remittances to the country in 2020. However, according to World Bank data, for every $200 sent in 2020, it cost the sender $17.8 (8.9 %). That equates to roughly $1.5 billion lost in fees, which is roughly the gross domestic product of Samoa.

If Nigeria were to eliminate remittance fees by using Bitcoin payment rails, Nigerians across the country would benefit financially. In Kenya and Ghana, the situation is similar. Thousands of Ghanaians and Kenyans live in the United States and regularly send money overseas. Crypto in Africa has surged in recent years, and remittance is one of the many reasons why. 

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Business

Kenyan e-commerce startup Nuzo partners with IDEO to boost economic development in Africa using blockchain

Kenyan Web3 startup Nuzo, is revolutionizing client retention and reducing payment costs for small and micro-retailers in Africa using blockchain. The company is launching this through its partnership with IDEO Last Mile Money, a global collaborative network focused on connecting underserved communities to the digital economy. 

Furthermore, according to its statement, Nuzo hopes to further develop its financial service products to offer savings and credit services to Nuzo retailers through this partnership.

Nuzo Founder Charles Nichols stated, “Nuzo is providing a way for small and micro-retailers to offer their customers rewards and incentives, which helps to improve customer retention by up to 35% and increase sales by up to 200%.”

He added, “In addition, by using the Celo blockchain, we are able to reduce the costs of payments for retailers by up to 90% compared to mobile money payment services like M-Pesa, which helps retailers improve their profitability and competitiveness.”

According to Nichols, Nuzo’s technology is not just benefiting retailers. It is also helping to increase financial inclusion in Africa. He further pointed out that according to the World Bank, only 33% of adults in Africa have an account at a formal financial institution. This lack of access to financial services makes it difficult for people to save money, access credit, and engage in financial transactions. By using the Celo blockchain for loyalty points, Nuzo is providing people with an alternative way to access financial services, which could help to increase financial inclusion in Africa. 

“Our goal is to onboard the next billion in Africa into the financial system using web3 technologies. By providing people with an easy and convenient way to access financial services, we believe that we can help to drive economic growth and development on the continent,” Nichols noted.

Additionally, Nuzo’s technology helps African women and unemployed young people. Numerous young people and women across the continent confront obstacles to economic engagement, such as a lack of access to financial services, education, and training. Nuzo aids in raising the earnings and enhancing the economic prospects of these groups by giving them new chances to accrue rewards points and use financial services.

Commenting on this Nichols stated, “Our technology is particularly beneficial for women and young people who are looking for ways to increase their incomes and improve their financial situation. By providing them with new opportunities to earn rewards and access financial services, we are helping to empower these groups and support their economic development.”

Nuzo’s technology is gaining traction in Kenya, with over 2,500 retailers already participating in the program. The company plans to expand its operations to other countries in Africa and plans to begin fundraising next year.

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Business

Kenyan Bitcoin mining company raises $2M

Kenyan Bitcoin mining company, Gridless revealed at the Africa Bitcoin Conference that it secured $2 million in a seed investment round led by bitcoin venture capital firm Stillmark and payments company Block, a firm that is led by Twitter co-founder Jack Dorsey.

The bitcoin mining company is known for generating new sources of energy in rural communities in East Africa.

According to Erik Hersman, CEO of Gridless, the investment will support the company’s further expansion of bitcoin mines across African markets. 

In its first year, Gridless started five projects in rural Kenya with African hydroelectric energy company HydroBox, three of which are operational. The company plans to expand to other East African regions in the near future.

Gridless designs, installs and operates bitcoin mining facilities alongside small-scale renewable energy providers in rural Africa where extra energy is underused. The bitcoin mining company also serves as the anchor tenant, financing the construction and managing the operation of data centers in rural locations where typical industrial or commercial customers are unavailable.

Alyse Killeen, the Managing Partner at Stillmark, noted in an announcement that Gridless brings a socially and environmentally conscious approach to bitcoin mining, one that provides tangible benefits by way of access to electricity for communities in rural parts of East Africa.

Thomas Templeton, bitcoin mining and wallet lead at Block, added: “Gridless represents a close strategic alignment with our vision of ensuring the bitcoin network increasingly leverages clean energy, in combination with bitcoin computational centers around the world.”

Gridless believes bitcoin mining can play a pivotal role as a buyer of first and last resort in creating more sustainable energy production and increasing electrification for local communities in the region. The electricity generated from these sites is prioritized for community electrification and to support community uplift businesses such as containerized cold storage for local farmers, battery charging stations for electric motorcycles, and public WiFi points. After those needs are met, the remaining electricity capacity is used to power the bitcoin computational mining data center.

“While bitcoin mining has been dominant in North America, Europe, and Asia, Africa presents a great opportunity to further diversify mining across the globe, helping to better secure the network. Renewable energy is abundant on the continent. This presents an excellent potential for profits for both energy generators and miners as well as the ability to deliver a real positive impact on the communities where it is put to use,” Herman emphasized.

Gridless’ funding comes as Africa experiences a grassroots crypto movement. It has the world’s highest proportion of retail payments of less than $1,000 and more peer-to-peer transactions proportionally than any other region. Bitcoin miners, however, have been struggling to survive amid this year’s grueling market conditions, which have seen bitcoin (BTC) prices fall and energy costs surge, reducing profit margins.

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Business

Nigerian Finance Bill Has Provisions Allowing The Taxing Of Crypto Transactions

According to the Nigerian Finance Minister, Zainab Ahmed,  provisions permitting the Government to levy taxes on cryptocurrencies and other digital currency transactions have been added to the country’s 2022 finance bill, which seeks to reform excise and duty regulations.

According to Ahmed, taxing these transactions is consistent with the Nigerian government’s overarching objective of raising more money from e-commerce.

As noted in a report by The Cable, when it starts collecting taxes on cryptocurrency transactions, Nigeria will join fellow African countries like South Africa and Kenya which already do so. Australia, India, the United Kingdom, and the U.S. are the other countries named in the report that also tax digital asset transactions.

According to a statement released by Laolu Akande, spokesperson to Vice-President Yemi Osinbajo, Ahmed updated the national economic council (NEC) on the main features of the bill at an extraordinary virtual meeting hosted last week.

The minister also noted that the proposed bill is anchored on five fundamental policy drivers including tax equity, climate change, job creation/ economic growth, tax incentives’ reform, and revenue generation/tax administration.

Commenting on the proposed bill Ahmed stated that it clarified the taxation of cryptocurrency and other digital assets in line with the Government’s policy thrust of enhancing cross-border and international taxation of growing e-commerce with emerging markets.

She further stated that by doing so, Nigeria would join the league of jurisdictions currently taxing digital assets, including the UK, the US, Australia, India, Kenya, and South Africa.

Ahmed also emphasized, “Also the bill contains an amendment under Chargeable Assets stating that ‘subject to any exceptions provided by this Act, all forms of property shall be assets for this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.”

After Ahmed’s presentation, the Governors of Sokoto, Borno, Kaduna, Kebbi, and Ogun states, among others, also commented on the bill. Their input is reportedly included in the draft bill which must be sent to the Federal Executive Council. After this step, it then goes to the Nigerian national assembly.