Crypto in Africa: Kenyan’s scammed, growth in West Africa, Nigeria

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Countries in Africa are destined to use blockchain technology and cryptocurrency to change their societies as a whole. While many are using these technologies for good, some are still looking for an easier path to illegal activities.

Kenya crypto investors duped

Many Kenya investors are still in shock after an alleged crypto-fueled pyramid scheme executed their exit scam.

According to local reports, a scam called Velox 10 has closed shop after stealing millions from unsuspecting Kenyan cryptocurrency investors. This happened last week when the company closed its website put its domain up for auction.

Velox 10 began operating in the country after holdng a colorful launch in September 2017, held at the Hotel Intercontinental in Nairobi. 

The company had been luring investors by claiming to be a “bitcoin investment fund.” Richard Rocha, the founder of Velox 10, promised investors a daily profit of up to $4000. Investors got profits depending on the amount of “membership fee” they paid to the company. Rocha had also pledged to take the biggest contributors on an all-expenses-paid trip to the United Arab Emirates. In this trip, they were also promised a meeting with “top global business gurus.”

According to local reports, one victim, Ester Muthoni had invested 3.2 million Kenyan shilling ($32000) and was promised to earn up to 50 percent profit on her investment. Velox 10 failed to deliver on their promise. Her efforts to get her money back bore no fruit, leading to her reporting the matter to police.

Earlier this year, seven Kenyans had filed a case with the High court in the country to stop Velox 10 from operating the state. However, the company still managed to continue with their operations. The firm was charging a membership fee of Kshs. 10,000 ($100) and an upgrade option of Kshs. 20,000 ($200) to investors.

Nigeria’s cryptocurrency potential expounded

Africa as a whole has seen tremendous changes when it comes to cryptocurrencies. Countries like South Africa, Kenya and recently Uganda have opened doors to welcome this new technology. However, many countries in Africa are yet to accept what blockchain and its technology has to offer to their economy. Nigeria is one such country. Home to over 190 million people, that country has been lagging behind when it comes to these technologies.

Being one of the most populated countries on the continent, Nigeria offers a big market for cryptocurrency adoption. However, various factors have hindered crypto growth in the country. Like many countries in Africa, the Nigerian government has had a strong opinion on cryptocurrencies. They went as far as to ban crypto trade. The country’s banking sector has also not been welcoming to digital currencies since the introduction of cryptocurrencies, banks and other financial institutions have strongly opposed digital currencies which seem to threaten their operations.

Additionally, criminal activities have held back the spread of crypto in Nigeria. Locals fear to invest their money only to lose it all to a scam. Over the years, Nigeria has seen many crypto related schemes, including Calabar, an alleged Bitcoin Core (BTC) trading company.

Despite these setbacks, many still believe the country could turn around their cryptocurrency fortunes. In addition to the population, Nigeria has one of the most entrepreneurial environments, which could help facilitate crypto growth.

Crypto union partnership with Zaddex

The Crypto Union, a tri-product blockchain banking project and Zaddex, a newly launched cryptocurrency exchange have partnered up to help grow the West Africa SME (Small and Medium Sized Enterprises) space.

According to the announcement, the two want to boost SME in West Africa. The newly formed partnership will provide funding through a new security token platform.

Zaddex completed its final stage testing about two weeks ago. Reportedly, the platform plans to use its native platform coin, ZEX, and it will offer discounted trading fees as it functions as a medium of payment for cryptocurrency listing requests.

In the announcement, Crypto Union revealed that the cryptocurrency would soon be exclusively available through the platform when the launch is completed. The crypto will be reserved to help market the project further, develop the decentralized counterpart and to establish and maintain the STO platform.

The partnership also provides Zaddex with the licensing required to operate in West Africa.