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The Growing Presence Of Bitcoin In Africa Raises Environmental Concerns, Warns UN Report

Africa is quickly becoming the focal point of Bitcoin’s expansion, driven by tightened regulations in other regions and its flourishing adoption in nations like the Central African Republic, Nigeria, and Ghana. However, a recent report affiliated with the United Nations has highlighted significant environmental concerns related to this surge.

According to the study encompassing 76 countries, Bitcoin’s rapid growth is not without consequences. Dr. Kaveh Madani, director of the United Nations University Institute for Water, Environment, and Health (UNU-INWEH), emphasized, “Technological innovations are often associated with unintended consequences, and Bitcoin is no exception.”

During the study period from 2020 to 2021, the water usage attributed to global Bitcoin mining surpassed the total consumption of 300 million people in rural sub-Saharan Africa. Furthermore, if Bitcoin were considered a nation, its energy consumption would rank it 27th in the world, surpassing that of many African countries. The report revealed that the global Bitcoin mining network consumed a staggering 173.42 terawatt hours of electricity, resulting in a carbon footprint equivalent to burning 84 billion pounds of coal or operating 190 natural gas-fired power plants. To offset this, 7% of the Amazon rainforest would need to be replanted.

Coal constituted 45% of Bitcoin’s energy supply mix, while natural gas accounted for 21%. Hydropower, a renewable energy source with substantial environmental impacts, provided 16% of electricity demand.

While no African nation currently ranks in the top 10 for Bitcoin-related resources, countries such as Ethiopia, Egypt, and Angola have already experienced significant water impacts due to Bitcoin mining.

Dr. Sanaz Chamanara, the lead author of the study, pointed out, “Because countries use different sources of energy to generate electricity, their electricity production impacts on climate, water, and land are not the same.”

In light of these findings, the UN scientists advocate for investments in more environmentally friendly digital currencies. They also stress the importance of social justice in addressing the issue. Dr. Madani remarked, “When you consider which groups are currently benefiting from Bitcoin mining and which nations and generations will suffer the most from its environmental consequences, you can’t help but think about the inequity and injustice implications of the unregulated digital currency sector.”

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Blockchain Gaming Industry Sees $2.3 Billion In Investment Despite Challenges

In the face of a challenging market, the blockchain gaming industry has showcased remarkable resilience, securing an impressive $2.3 billion in investments throughout 2023, as per the latest report from DappRadar. Although this figure reflects a 30% dip from the previous year’s $3.3 billion, the sector’s ability to navigate the obstacles of the bear market stands as a testament to its strength.

Key Highlights

DappRadar’s report meticulously breaks down the investments received by the gaming sector in 2023. The first quarter saw an influx of $739 million, followed by $973 million in the second quarter and $600 million in the third quarter. A comparative analysis between the third quarter of 2022 and 2023 revealed a significant 50% drop in funding, plummeting from $1.2 billion in the corresponding period last year.

The report delved into specific categories of investment, disclosing that $213 million was directed toward metaverse-related games and technology. The remaining funds found their way into Web3 gaming infrastructure and investment firms.

Insights from the Report

The report provided a crucial perspective, stating, “This quarter witnessed Web3 gaming projects amassing a notable $600 million, propelling the year’s tally to $2.3 billion. While this constitutes just 30% of the funds pooled last year, it’s essential to keep in perspective the distinct market dynamics of 2023.”

The Decline of Play-to-Earn Gaming

A noteworthy trend in the blockchain gaming sphere has been the decline in the popularity of play-to-earn games, where players are rewarded with cryptocurrencies or digital assets. The crypto winter witnessed a decline in interest, causing some industry players, such as Sega, to withdraw from the market. Sega’s co-chief Operating Officer, Shuji Utsumi, bluntly described the gaming experience as “boring” and uninteresting.

However, amidst the challenges, there are success stories. Nigerian-based crypto venture studio Nestcoin strategically spun off its gaming project, Metaverse Magna (MVM), into an independent entity to ensure its survival following FTX’s collapse. According to MVM’s CEO, Yemi Johnson, crypto gaming remains viable, but previous models were flawed, lacking a deep understanding of the market’s nature and needs.

In the midst of uncertainties, the blockchain gaming industry continues to evolve, demonstrating adaptability and innovation, thereby paving the way for a resilient future.

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Business

Crypto Fest 2023: Africa’s Gateway To Blockchain Revolution

Crypto Fest, the event dedicated to digital currencies and distributed ledger technology in Africa, is gearing up to unite the community after a period of uncertainty. Over the past year, significant strides have been made, solidifying the understanding and adoption of these transformative technologies across the continent.

The 2023 African Blockchain Report, conducted by CVVC and Standard Bank, reaffirms South Africa’s position as a trailblazer in blockchain innovation and funding within Africa. Startling statistics reveal that African blockchain startups amassed an impressive $474 million, constituting 15% of the total venture funding raised on the continent. Remarkably, this growth rate stands at 12 times higher than the general venture capital rate.

Despite being the fastest adopter of cryptocurrencies globally, Africa still receives a mere fraction (1.8%) of the global blockchain venture funding. This discrepancy highlights a significant opportunity for investors and entrepreneurs to harness the potential of blockchain technology, showcasing its positive impact on the African landscape.

Notably, remittances continue to dominate cryptocurrency usage in Africa, constituting the primary use case, as traditional methods prove costly and time-consuming. Cryptocurrencies provide a swift and cost-effective alternative, enabling individuals to send money across borders swiftly and inexpensively.

Moreover, cryptocurrencies play a pivotal role in promoting financial inclusion across the continent. With infrastructure challenges limiting access to traditional banking services for approximately 57% of the population, cryptocurrencies, accessible through smartphones, offer a viable alternative to conventional banking in Africa.

However, with mass adoption comes concerns about safety, as scammers exploit the rapid growth of the market. Addressing this issue, Crypto Fest will delve into key topics, exploring methods to safeguard digital assets amidst market volatility and uncertainty.

Attendees can anticipate expert insights into potential risks associated with cryptocurrencies and effective strategies to mitigate them. Additionally, discussions will encompass institutional adoption, regulatory considerations, and compliance issues shaping the crypto landscape.

Ticket holders will also gain complimentary access to invaluable crypto workshops facilitated by esteemed partners. Web3 Sanctuary’s “Cryptopia 101: Your Inaugural Dive into the Web3 Universe” will provide attendees with fundamental knowledge about cryptocurrencies and blockchain. Hosted by Devon Krantz, the founder and CEO of Web3 Sanctuary, the session will cover topics such as the distinctions between cryptocurrencies and traditional money, the mechanics of blockchain enabling trustless and decentralized transactions, and real-world applications across various sectors.

Kent Fourie, Co-Founder of Graph, will introduce attendees to The Graph protocol, unraveling the complexities of decentralized APIs and the data layer of Web3. Crypto Fest aims to shed light on the potential economic impact of these emerging technologies in Africa, emphasizing the critical importance of crypto safety for individual investors and the broader economic landscape.

Furthermore, the event will feature a Startup Pitch Competition, providing a platform for the next generation of Web3 innovators to present their groundbreaking ideas before a discerning panel of judges. This initiative aligns with Crypto Fest’s commitment to fostering new developments and bolstering the growth of the crypto industry.

This is an unmissable opportunity to connect with industry leaders, influencers, and enthusiasts, making Crypto Fest 2023 the gateway to Africa’s blockchain revolution.

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Business

Nigerian Bank Allegedly Freezes Accounts of 500 USDT Traders Amid Hacking Scandal

Recent reports circulating on social media suggest that Nigeria’s Access Bank has taken the drastic measure of freezing the accounts of approximately 500 USDT traders. The bank reportedly obtained a court order allowing it to impose a lien on these crypto traders’ bank accounts, citing their involvement in a cybercrime incident.

According to the claims, Access Bank initiated this action due to a significant loss it incurred, allegedly amounting to over $10.4 million or 8 billion naira, between May and June this year. The bank alleges that the affected traders received funds that were part of the sum stolen by hackers during this period. It is speculated that these funds were used to purchase Tether (USDT) from traders on the Binance platform.

The news of the frozen accounts has sparked outrage within the cryptocurrency community and beyond. Rume Ophi, also known as the Cryptopreacher and the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), strongly condemned Access Bank’s actions. He labeled the freezing of crypto traders’ accounts as “a disgrace to Nigeria’s banking infrastructure” and argued that it posed a severe threat to the nation’s budding crypto industry.

In response to the situation, Ophi emphasized the importance of conducting thorough investigations to identify and apprehend the criminals responsible for the hacking, rather than resorting to blanket freezes on accounts of individuals involved in cryptocurrency transactions. He stressed that this indiscriminate approach not only fails to address the core issue but also inflicts further harm on innocent individuals.

This incident also brings attention to the ongoing conflict between the Nigerian crypto community and the Central Bank of Nigeria (CBN). The CBN’s previous directives, issued in February 2021, had compelled banks to block accounts of individuals suspected of using the banking system for crypto-related activities. Despite these measures, many digital asset traders have continued to rely on traditional banking services, raising questions about the role of banks in enforcing the CBN’s policies.

The situation remains fluid, with both crypto enthusiasts and regulatory authorities closely monitoring developments as the nation’s crypto industry grapples with these challenges.

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Business

Vella Finance Shifts Focus To SME Banking, Ceases Crypto Operations

In a strategic move, Vella Finance, a pioneering fintech company, has decided to discontinue its cryptocurrency-based services to concentrate solely on Small and Medium Enterprise (SME) banking. The firm, which originally aimed to facilitate crypto spending in Africa and establish global payment infrastructures for businesses, recently informed its users and subscribers via email that all crypto-related operations, including trading, deposits, wallets, and fiat-to-crypto swaps, will cease on October 30, 2023.

Launched in 2021, Vella Finance has been instrumental in enabling businesses to accept global payments and conduct crypto transactions. Despite their success in the crypto sphere, the company’s co-founder, Tolu Adedayo, explained the decision as a necessary business move. He stated, “We’re going fully into SME Banking. Banking requires playing within regulatory confines. We already serve businesses from the onset backed by user and transactional data. It makes sense to offer an end-to-end banking system to serve them better. It’s a business decision; there’s no way we will run banking and crypto together.”

Vella Finance’s notable offering, “Launch by Vella,” allowed small businesses to formalize their operations by registering with the Corporate Affairs Commission for a fee of N18,000 ($14). This service, coupled with providing instant business bank accounts and essential payment infrastructure for local and online payments, aimed to address the needs of underserved and informal SMEs, crucial contributors to Nigeria’s GDP.

Adedayo emphasized their commitment to supporting SMEs, stating, “A good number of the SMEs driving Nigeria’s GDP are informal and financially underserved. What we do at Vella is help them formalize via Launch by Vella, give them instant business bank accounts, and provide them with payment infrastructure to enable payment collections locally on their websites/online stores. Vella also allows them to create invoices and payment links for free.”

Looking ahead, Vella Finance plans to enhance its offerings further. Adedayo hinted at upcoming developments, saying, “We will be announcing new features in the coming weeks that solidify our full entrance into the business banking space.” This strategic shift underscores Vella Finance’s dedication to supporting the growth and development of SMEs in Nigeria while adhering to regulatory guidelines.

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Business

Nigerians Turn To Stablecoins Amidst Naira’s Depreciation

In the midst of the Naira’s steep decline, Nigeria is witnessing a significant shift in its financial landscape, marked by a growing embrace of stablecoins and cryptocurrencies. Despite global market fluctuations, the country has experienced a remarkable 9% surge in crypto usage over the past two years, a trend highlighted in the latest report by Chainalysis, a renowned research group.

This surge in crypto adoption in Nigeria is closely intertwined with the drastic depreciation of the Naira, which has lost a staggering 65% of its value against the US dollar since June. Following the Central Bank’s decision to allow the Naira’s exchange rate to float, households and businesses have turned to stablecoins and Bitcoin as a means of preserving their wealth and facilitating transactions.

Stablecoins, particularly USDT, have emerged as a vital tool in this context. Bisola Asolo, CEO, and co-founder of Super, a web3 billing platform, describes stablecoins as “crypto’s killer application for the African continent.” Their ability to preserve wealth effectively in comparison to the volatile local currency has led to their widespread adoption. Binance, the world’s leading cryptocurrency exchange, has played a pivotal role by offering Nigerians convenient access to USDT and other cryptocurrencies. According to Chainalysis, Nigerian exchanges have witnessed an astounding $60 billion in stablecoin transactions between August 2021 and July 2023, underlining the significant role stablecoins play in the Nigerian crypto ecosystem.

The growing adoption of stablecoins has streamlined cross-border transactions and fund transfers, offering businesses and individuals a hassle-free alternative amidst mounting inflation and a diminishing Naira value. Tour operators are now quoting packages in US dollars and accepting USDT as a payment option, demonstrating the ease and convenience stablecoins bring to businesses.

Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria, underscores the significance of stablecoins in mitigating financial challenges. Stablecoins, he notes, facilitate seamless value transfers and business transactions in Africa, a region where traditional financial dealings can be cumbersome. Binance’s strategic positioning in the market, especially after regulatory restrictions in 2021, has further fueled the adoption of cryptocurrencies. The Binance peer-to-peer (P2P) exchange, offering USDT to Naira trading, has effectively created an alternative currency market parallel to traditional exchanges.

Nigeria’s rapid adoption of stablecoins signifies the resilience and adaptability of its citizens in the face of economic uncertainties. The trend also emphasizes the pivotal role of accessible and user-friendly platforms like Binance in propelling crypto adoption in emerging markets. As Nigerians navigate economic challenges and a volatile Naira, the adoption of stablecoins and cryptocurrencies is poised to continue its upward trajectory, showcasing the nation’s innovative spirit in the digital financial realm.

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Business

New York Attorney General Sues Luno’s US Owner DCG for Alleged $1 Billion Fraud

In a significant legal development, New York Attorney General Letitia James has filed a lawsuit against cryptocurrency companies Genesis Global, its parent entity Digital Currency Group (DCG), and Gemini, accusing them of defrauding investors of over $1 billion. DCG, which owns the South African cryptocurrency exchange Luno, finds itself entangled in this lawsuit. This case highlights the persistent challenges faced by the crypto industry, following the aftermath of the FTX exchange bankruptcy led by Sam Bankman-Fried almost a year ago. The consequences of this event rippled across the sector, affecting several major firms.

Attorney General James aims to secure restitution for investors and the disgorgement of ill-gotten gains through the lawsuit. Additionally, she seeks a ban on all three cryptocurrency firms from participating in the financial investment industry in New York.

At the core of the lawsuit is a program called “Gemini Earn,” a joint venture between Gemini and Genesis. This initiative allowed customers to lend crypto assets, including bitcoin, to Genesis. Despite billing the program as a “low-risk investment,” Gemini allegedly failed to disclose that their internal analyses had identified Genesis as financially precarious. Notably, Genesis’ loans were reportedly undersecured and highly concentrated with Alameda, Bankman-Fried’s crypto hedge fund that eventually went bankrupt. This critical information was allegedly concealed from investors participating in Gemini Earn, according to James.

Gemini, founded by the Winklevoss twins known for their legal battles against Meta Platforms’ Mark Zuckerberg, responded to the lawsuit on messaging platform X, asserting that it confirms their longstanding claims. However, the company disagreed with the decision to sue Gemini itself.

The conflict between Genesis and Gemini has escalated over the past few months, particularly concerning the Gemini Earn program. Gemini also holds the position of the largest creditor of Genesis, which filed for bankruptcy protection in January. This lawsuit adds another layer of complexity to the ongoing disputes within the cryptocurrency industry, raising questions about transparency, investor protection, and the sector’s overall regulatory framework.

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Business

Behind Vibra’s Closure: Financial Woes, Governance Issues, and Crypto Winter Challenges

Vibra, an Africa-focused crypto trading app, has ceased operations in Ghana, Kenya, and Nigeria, raising concerns about the fate of its users and the reasons behind its abrupt closure. While Vincent Li, the co-founder of African Blockchain Labs, which developed Vibra, claimed that the suspension was temporary and restricted to Nigerian users, recent reports paint a different picture.

According to an Oct. 18 Techcabal report, current and former employees, who preferred to remain anonymous, confirmed the app’s shutdown across all African markets. Employees revealed that they were given the ultimatum to resign or face termination. Financial struggles also plagued Vibra, with one ex-employee suggesting that the company failed to generate sufficient revenue.

Li’s assertion that only Nigerian users were affected seemed contradicted by messages on Vibra’s Telegram channel, indicating a broader impact. The demise of Vibra, reminiscent of other ambitious African crypto startups facing challenges in 2023, has been linked to the industry-wide phenomenon known as the “crypto winter.” During this period, startups in the crypto and fintech sectors, which previously raised substantial funds, have either downscaled or halted operations due to market pressures.

However, the collapse of startups like Vibra and Ghanaian firm Dash has been attributed not only to market fluctuations but also to corporate governance failures and founder-led fraudulent activities. Dash, despite amassing over $86 million in capital over five years, serves as a stark reminder that financial backing alone cannot guarantee success in the volatile world of crypto startups.

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Business

Patricia Clarifies Office Controversy and Debt Token Conversion Plans Amidst Customer Skepticism

Nigeria’s cryptocurrency platform, Patricia, is addressing concerns raised by a video circulating on social media allegedly showing its empty office space, fueling suspicions that the company absconded with customers’ funds. Patricia, which suffered a $2 million hack in May, has faced skepticism despite holding town hall meetings and sharing plans for customer repayments. The video, posted on Instagram, indicated a frustrated customer’s attempt to seek answers at Patricia’s supposed physical office.

However, in response to an inquiry, Hanu Fejiro, Patricia’s CEO, clarified that the company operates as a fully remote organization. He explained that the office in the video was an innovation hub established in 2022 to provide free working spaces for developers and crypto enthusiasts. Patricia does not actively operate from that location, Fejiro emphasized. He revealed that the company relocated its headquarters to Villanius, Lithuania, following the Central Bank of Nigeria’s cryptocurrency trading ban in 2021, creating a globally dispersed team.

Fejiro confirmed recent reports that Patricia is offering users the option to convert their debt tokens into company shares, which aligns with their fundraising and debt reorganization strategy. Users are being provided with an opportunity to transform their debt tokens into convertible notes at a favorable discount in Patricia. These shares will be managed by a trusted third-party with a SEC license, ensuring complete transparency, he assured.

Patricia’s decision to convert customers’ assets into a debt management token, the Patricia token, received mixed reactions. The company hopes to use these tokens to repay customers, contingent upon the company’s profitability. However, frustrated customers, unable to access their funds since April due to withdrawal issues with the Patricia Plus app, remain unconvinced. Patricia’s CEO disclosed during a virtual town hall meeting on September 29 that the Patricia Plus app, set for relaunch, is currently undergoing beta testing. Customers have been informed of plans to redeem their balances in batches upon the app’s relaunch, Fejiro stated.

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Central African Republic Arrests Crypto ‘Rug Pull’ Mastermind as Associates Flee the Country

Law enforcement authorities in the Central African Republic have made a breakthrough in capturing one of the suspected masterminds behind a crypto scam that left numerous citizens at a financial loss. Investors, including high-level politicians, senior civil servants, and traders, claimed that the operators of the rapidly growing crypto company known as Clé du Succès, meaning “key to success,” disappeared overnight, taking their investments with them.

The Journal de Bangui reported that Bryan Ndikum, a Cameroonian national, was apprehended in Berberati, and it is believed that he and his associates operated Clé du Succès from the CAR capital, Bangui. Ndikum had reportedly been sent to Berberati to establish a regional office for the company. However, it is suspected that his associates, described as Nigerians and Cameroonians, have already fled the country.

Law enforcement officials revealed that Ndikum and his team launched an aggressive advertising campaign, focusing on cryptocurrencies. While Ndikum has not yet been officially charged, he is expected to face charges related to fraud and breach of trust.

The alleged fraudsters used Bitcoin (BTC) logos in their marketing materials and promised potential investors a 20% return on their investments. However, following fake reports of an armed attack 17 kilometers outside the capital, Clé du Succès executives vanished without a trace, reportedly absconding with over $1.6 million in crypto and fiat currency.

Even employees at the company remain in the dark about the executives’ whereabouts. The company’s office has remained closed for over a week, leaving both its staff and customers in a state of uncertainty.

Crypto has been a significant topic of interest in the Central African Republic for some time, with adoption on the rise not only in the country but also in the greater Sub-Saharan Africa region. Last year, the CAR government made headlines by announcing the adoption of Bitcoin and other cryptocurrencies as legal tender, a move that echoed a similar decision by the pro-Bitcoin government of El Salvador.

However, this celebration in the crypto community was short-lived, as less than a year later, the CAR National Assembly repealed the decree.