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Mob Burns Down Purported Crypto Ponzi Schemer’s House in South Africa

A mob has burned down the house of Sphelele Mbatha, the manager of an alleged crypto Ponzi scheme, Bitcoin Wallets.

An angry mob in Ladysmith, South Africa has reportedly torched the residence of Sphelele Mbatha, known as Sgumza, a manager of alleged crypto Ponzi scheme Bitcoin Wallet. The mob was likely a collection of victims who lost money through Bitcoin Wallet, according to the report by Ladysmith Gazette on July 10. 

The local police have been investigating an unnamed Ponzi Scheme in Ladysmith, as reported by IOL. According to the report, however, Bitcoin Wallet minimally appears to have made get-rich-quick promises to prospective investors. 

An unnamed community member reportedly told the publication that Bitcoin Wallet promised to double investors’ money within a matter of weeks: 

“From what we have heard, Bitcoin Wallet is an investment, not a pyramid scheme. […] He (the owner) has spoken in the media, that he invests the money in bitcoins and is able to double that money within three hours. […] If you put in an amount of R100000, you get back an amount of R200000 in 15 days.”

As per an earlier announcement, Sgumza told Ladysmith Gazette, just five days prior to the arson event, that he was simply a manager, without knowledge or power over the company’s alleged back-end troubles:

“I don’t know what’s going on. I don’t know online or how this system works. I have to be workshopped. The owner of the company is operating the online business. I was only the manager of the Ladysmith branch.”

Sgumza further claimed that he himself lost money and was now out of a job:

“I won’t continue working. I don’t have cash anymore. The owner says people must go online and collect their money online. I, myself, have invested my money in there. I submitted my banking details online and now I am also waiting.”

Tensions have reportedly been high in the area, with a communications officer receiving complaints about crowds, public disturbance, and traffic congestion. Moreover, clients reportedly engaged in a scuffle when Bitcoin Wallets staff turned them away while they tried to enter the company offices.

Sgumza reportedly said in a radio interview on July 9 that Bitcoin Wallets customers were being defrauded by a presumably unrelated scam. The scam reportedly targeted people who were creditors of Bitcoin Wallets, saying they needed to log onto a website to collect their funds. 

As reported by Cointelegraph on July 2, South Africa was trading Bitcoin at almost $11,000 on the crypto exchange Luno, which was 10.5% higher than Cointelegraph’s price index at the time. Adamant Capital partner Tuur Demeester, however, cautioned that the listed price likely represents “inflation that is simply not recognized by the government.”

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BTC Peer-to-Peer Trading Rises Amid Ban on USD in Zimbabwe: Report

Since Zimbabwe’s central bank banned crypto services in 2018, Bitcoin has continued to rise amid new ban on foreign currencies.

Bitcoin (BTC) trading in Zimbabwe has continued to surge after the government banned the use of foreign currencies on June 24, business news agency Quartz Africa reported on July 10.

The country is reportedly seeing a rise in peer-to-peer (P2P) crypto trading as there are no local exchanges offering cryptocurrency transactions due to the existing ban on providing such services enacted by Zimbabwe’s central bank in May 2018.

Since Zimbabwe recently re-introduced its local currency, the Zimbabwe dollar (ZWD), after abandoning it in 2009, Bitcoin has apparently become a more attractive store of value than the new fiat currency, associated as it is with uncertainty, the report notes. As such, over the past week, Zimbabwean citizens have reportedly been using services such as Paypal, Western Union and Moneybookers to trade Bitcoin outside the country at prices of up to $12,700.

Tawanda Kembo, CEO and founder of local crypto exchange Golix, reportedly claimed that local demand in Bitcoin is higher than supply, which inflates over-the-counter and P2P Bitcoin trading.

Zimbabwe, known as one of the most active crypto markets in Africa before the central bank’s ban of crypto services, was reportedly seeing a notable surge of Bitcoin trading recently, with some media commentators claiming that Bitcoin was locally trading at as high as $76,000 on P2P site LocalBitcoins.com on July 2. As Cointelegraph reported, those numbers were allegedly indicating the “black market” for the U.S. dollar that is held in mobile payment service EcoCash.

Following the ban on local financial institutions providing crypto-related services, in September 2018, Zimbabwe’s finance minister argued that the country should adopt Bitcoin at the governmental level in a manner similar to Switzerland.

Recently, the deputy governor of the Bank of Uganda warned the public about the risks associated with decentralized cryptocurrencies, particularly outlining the limited level of investor protection.

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Central Bank of Uganda Warns Decentralized Cryptocurrencies Are Risky

The deputy governor of the Bank of Uganda has warned the public about the limited protections offered them when they invest in unregulated cryptocurrencies.

The deputy governor of the Bank of Uganda has warned the public about the limited protections offered them when they invest in unregulated cryptocurrencies.

English-language Ugandan daily New Vision reports on June 28 that the bank’s deputy governor — Dr. Louis Kaskende — made his remarks during a Town Hall meeting in the city of Masaka, which was devoted to educating the public about the institution’s activities and role. 

Despite bitcoin being designed, in particular, as a politically-neutral money, Kaskende reportedly underscored the risks of crypto trading and adoption, stating that:

“[…] online cryptocurrency businesses are not regulated at the moment and therefore carry a significant risk of loss of savings, with no recourse to protection or insurance by government, like is the case with regulated financial institutions such as commercial banks.”

In his remarks, the governor clarified that the central bank does not have a comprehensive oversight of all financial services firms and institutions, and that its supervision typically spans commercial banks, credit institutions, foreign exchange bureaus and money remittance service providers.

As Cointelegraph reported earlier this month, Uganda’s president, Yoweri Museveni, is set to officiate the 2019 Africa Blockchain Conference this July. The conference, devoted to preparing the continent for the so-dubbed “Fourth Industrial Revolution,” will cover areas such as fintech, payment systems, and the future of education.

This May, the charity arm of major crypto exchange Binance signed a Memorandum of Understanding with a Uganda-based non-governmental organization focused on improvements to local education.  

This week, three senior officials at the Bank of Uganda — including the director-in-charge of currency — were charged with alleged abuse of office and corruption in connection with a consignment of Ugandan currency from France.

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President of Uganda to Lead Blockchain Conference in Kampala in July

The President of Uganda is announced to lead the 2019 Africa Blockchain Conference on the “fourth industrial revolution.”

The President of Uganda, Yoweri Museveni, will officiate the 2019 Africa Blockchain Conference, according to a report by Kabuubi Media Africa on June 24

According to the report, The 2019 Africa Blockchain Conference — not to be confused with  The Blockchain Africa Conference 2019 which occurred in April — will be held from July 3 to July 4, and the theme is ’Africa 4.0:  Preparing Africa for the 4th Industrial Revolution.’ The conference topics will reportedly include fintech, payment systems, and the future of education.

President Museveni reportedly supported the use of blockchain technology in Uganda during his inaugural speech. Museveni is said to have cited four economic areas that he believes should be supported by blockchain technology: agriculture, manufacturing and processing, services, and the ICT sector.

Blockchain tech firm CryptoSavannah will reportedly be one of the organizers for the 2019 conference. The company’s director, Noah Baalesanvu, commented on the maturation of cryptocurrencies in Africa, saying:

“While initially being marred by scams and cons, significant value has moved to cryptos with major markets like Nigeria, Kenya and South Africa with significant crypto holdings also trading activity.”

In 2018, CryptoSavannah partnered with the major cryptocurrency exchange Binance to gain financial support for blockchain growth in Uganda. Binance CEO Changpeng Zhao claimed that his organization would create thousands of jobs in the country, tweeting:

“@binance will partner with @cryptosavannah @AggieKonde @HelenHaiyu to support Uganda’s economic transformation and youth employment through blockchain, embracing the 4th industrial revolution. We will do this by creating thousands of jobs and bringing investments to Uganda.”

As previously reported by Cointelegraph, Binance Charity Foundation signed a Memorandum of Understanding with a non-governmental organization based out of Uganda this April. The MoU aims to bolster the educational system of Kampala by providing a variety of supplies, ranging from solar panels to sanitary pads.

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Major Pan-African Insurance Firm Rolls Back Insurance for Crypto Mining Equipment

Pan-African insurance company Old Mutual has opted out of insuring cryptocurrency mining equipment due to the absence of regulation in the industry.

Pan-African insurance company Old Mutual has opted out of insuring cryptocurrency mining equipment due to the absence of regulation in the industry, local technology-focused new outlet ITWeb reported on June 10.

Following comprehensive research of the industry, Old Mutual has arrived at a decision not to insure equipment used for digital currency mining because of the unregulated nature of the industry.

Among other reasons, the company also named cryptocurrencies’ exposure to fraudulent activity and modified electronic infrastructure of mining equipment that leads to overheating and other malfunctions.

Christelle Colman, an insurance expert at Old Mutual, said that “we have chosen not to provide cover for this type of risk as it is quite tricky to conduct a proper risk analysis of an unregulated fledgling industry that is already on the radar of financial authorities due to the unfortunate association with money laundering and cyber crime.” Colman added:

“It is also a highly volatile industry that attracts a lot of speculators so there is no proper risk rating structure in the local market for this type of risk. Even doing a comprehensive inventory of the insured equipment is difficult because the value of the highly modified computer equipment is typically inflated and almost impossible to verify as it is usually imported from obscure suppliers in the Far East.”

Old Mutual released an annual Savings and Investment Monitor survey for South Africa last July, which polled respondents on awareness of and attitude toward cryptocurrencies in the country. The study showed that respondents generally had a positive regard of digital currencies, with 38% of respondents agreeing with the statement “I wish I had invested in [crypto] before” and 71% agreeing that “You can make a lot of money with them.”

At the same time, 43% of respondents agreed with the statement “They are bad news, like a pyramid scheme” and 53% said they do not understand how cryptocurrencies work. In terms of overall awareness, 40% of respondents answered that they were aware to varying degrees, while 60% said they were not aware of cryptocurrencies.

As reported in January of this year, the South African Reserve Bank issued a consultation paper assessing the benefits and risks of cryptocurrencies. In the paper, South Africa’s government clarified that it did not intend to ban either cryptocurrency trading, or crypto payments at the time.

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Overstock Subsidiary to Help Liberia Digitize Services, Boost Economy with Blockchain

A subsidiary of Overstock.com has reached an agreement to help Liberia digitize government services.

Overstock.com subsidiary Medici Land Governance has signed a memorandum of understanding with Liberia to help the African nation digitize government services, a news release announced on June 10.

The pro bono pilot project will explore how Liberia can strengthen its economy through blockchain and enhance interoperability between government departments. As well as strengthen the country’s capacity to generate revenues, the release notes that such infrastructure could reduce corruption.

During the project, local workers in Liberia will also be given technological trading to create sustainable jobs and ensure blockchain systems can be maintained once they have gone live. Ali El Husseini, the CEO of Medici Land Governance, said:

“Liberia is well-positioned to explore implementing a blockchain backbone for e-government, which connects the various government ministries as their services are digitized and brought online.”

According to Patrick M. Byrne, Medici Land Governance’s chairman and Overstock.com CEO, Liberia is the third country on the continent to put its suite of blockchain products to the test. He added:

“In 2019 I have been pleased and honored to see African nations growing enthusiastic about the possibility of using blockchain to accelerate their development.”

Last August, Zambia signed a MoU with Medici Land Governance that was designed to help rural landowners legitimize their estates and gain access to the financial world, in turn making it easier for the government to collect taxes.

A similar agreement was also signed in Mexico back in February.

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Binance Charity Foundation Signs Memorandum of Understanding With Ugandan NGO

The Binance Charity Foundation has signed a Memorandum of Understanding with the NGO Safe Future, launching a project focused on education improvements.

Binance Charity Foundation (BCF), the charity arm of major crypto exchange Binance, has signed a Memorandum of Understanding (MoU) with Safe Future, a non-governmental organization (NGO) in Uganda focused on local education improvements. Binance announced the development in an official blog post on May 30.

The Binance for Children Special Impact Education Project Uganda reportedly aims to provide a number of new supplies to schools in Uganda, such as solar panels, sanitary pads, school supplies, LED screens, as well as breakfast and lunch for students.

According to the CEO of Safe Future, Mula Anthony, these developments will reach 100,000 students and 160 schools in the region. As shared in an official Twitter post shared on May 28, Anthony said the project has begun with the installation of lighting kits in two Kampala schools.

As previously reported on Cointelegraph, the BCF previously launched its pilot charity campaign “Lunch for Children” with the stated aim of providing breakfast and lunch to students in Kampala throughout 2019. As per the recent announcement, the project has since expanded to include 10 schools in Kampala and Jinja. The charity arm of Binance reportedly intends to ultimately aid one million students in Africa, in countries such as Rwanda, Kenya, and Ethiopia.

In April, the BCF opened a cryptocurrency donation channel to fund the rebuilding of the Notre Dame cathedral. The program, called “Rebuild Notre-Dame,” had received thousands of dollars via bitcoin (BTC), ether (ETH), and Binance’s internal token Binance Coin (BNB).

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Rwanda’s Central Bank Issues PSA on Alleged Cryptocurrency Get-Rich-Quick Scams

The National Bank of Rwanda has issued a PSA on alleged cryptocurrency pyramid schemes and ICO scams happening in the country.

The National Bank of Rwanda, the country’s central bank, has issued a public service announcement on alleged cryptocurrency scams, according to an official Twitter post on May 30.

The central bank specifically warns the public about initial coin offering (ICO) scams and crypto-based Ponzi schemes, which purport to offer a quick and significant return on investment for early adopters. These sorts of scams have reportedly been active in Rwanda, through firms like Supermarketings Global Ltd, 3 Friends System (3FS) Group Ltd, OneCoin, and Kwakoo (OnyxCoin).

The National Bank of Rwanda cautions investors to vet their potential projects, and reminds the public that it does not offer any recompense for scam victims.

According to a report by Cointelegraph, a study in 2018 concluded that over 80% of ICOs  during the previous year were scams; however, only 11% of total funds invested in ICOs during 2017 were lost due to fraudulent activity.

On May 28, Russian police reportedly made an international arrest of the alleged creator of a Kazakhstan-based crypto pyramid scheme, which cost at least one investor approximately 14 million Kazakhstan tenge ($36,700). The suspect was declared wanted by Interpol after leaving Kazakhstan in early 2019.

May of 2019 has additionally seen two other large-scale allegations and investigations around crypto scams across the globe, in the United States and Brazil.