Weeks after, the fallout from crypto exchange FTX’s crash is still playing out, and more crypto exchanges are facing the heat.
Yesterday, BlockFi, another crypto exchange and lending platform, filed for bankruptcy along with eight affiliates.
ICYMI: In July, BlockFi borrowed $400 million from FTX after it suffered a $80 million loss and was forced to lay off one-fifth of its staff. Earlier this month, after the FTX debacle hit the news, it revealed that it had suffered “significant exposure” to FTX and Alameda with some of its assets held on FTX. At the same time, it announced it was exploring options to “maximise value for its users”, one of which was bankruptcy.
Now—post-bankruptcy filing—BlockFi has revealed that it has about $10 billion in assets and liabilities and over 100,000 creditors. This includes a $30 million loan from the US Securities and Exchange Commission (SEC), and $729 million from Ankura Trust Company.
The exchange presently has $257 million at hand which it says will be used to support operations during a restructuring in which it will try to stabilise its operations.
The company will also be laying off more of its 850-strong staff members.
NIGERIA TO AVOID CRYPTOCURRENCIES
The Nigerian government is continuing to look away from crypto.
Per Bloomberg, the country’s Securities and Exchange Commission (SEC) announced that it will not be including crypto in future plans to improve trading in digital assets.
According to SEC director-general, Lamido Yuguda, “We are looking at digital assets that really protect investors, not necessarily crypto.”
Earlier in May, the SEC published new rules relating to the issuance, exchange and custody of digital assets in the country. Unlike the Central Bank of Nigeria which restricted banks and other financial institutions from engaging crypto-related businesses, the SEC’s rules laid down guidelines for operating crypto-related businesses. These rules included requirements for certain licences and employment of anti-money laundering (AML) measures.
At the time, analysts had predicted that this move by the SEC could boost crypto adoption in the country which was one of the top 10 countries with the highest cryptocurrency transactions in 2021.
Months later, the SEC is not toeing this path but appears to be tilting towards the same direction as the Central Bank of Nigeria (CBN). In 2017, the CBN ordered all commercial banks “not to use, hold, trade and/or transact in cryptocurrencies “ and it reinforced this stance in 2021. It cited reasons such as insecurity and deregulation of the sector.
While the SEC isn’t restricting crypto trading per se, it’s also sharing concerns about the volatility of cryptocurrency. According to Yuguda, the Commission is seeking to promote investment in “serious digital assets”. “The commission is in the business of protecting investors, not in the business of speculation,” the DG said.
Zoom out: Just in case you’re wondering, other digital assets the SEC will be promoting investments in include central bank digital currencies (CBDCs) like the e-naira, security tokens, and tokenised assets.
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News media Profit reported that Swvl has completely shut down its operations in Pakistan after three years of operating there. The startup offered three kinds of mobility services: intracity bus rides, intercity bus rides, and customised corporate services. The customised service offered businesses access to Swvl’s vehicle and driver network, as well as consulting and reporting services. Despite gaining its second-largest market and revenue there, Swvl has shut down these services without publicly stating the reasons why.
Swvl’s money troubles
Swvl has been coursing through the frigid tech ecosystem with a high cash-burn model, which has financed its expansion efforts—acquisitions and an IPO. The startup has been increasingly cash-flow negative for months—for the first half of the year, it made $40.7 million in revenue but lost over $161.6 million. Swvl is also facing the possibility of being delisted from Nasdaq as it is selling below the minimum threshold—below $1. These shutdowns and layoffs are arguably a part of the company’s efforts to turn cash flow positive and turn things around by 2023.
NIGERIA SLASHES TELECOMS CHARGES BY 90%
It is the season of discounts!
Nigeria’s capital, Abuja, is shaving 90% off the right-of-way fee. Now, telecommunications companies that wish to install broadband infrastructure in green areas would only have to pay ₦14.50 ($0.033) per metre instead of ₦145 ($0.33). This will take effect on December 1, 2022, and last for two years.
Zoom in: Green areas are places where there is no telecommunications equipment—underground internet cables and other telecommunication equipment. When telecommunications companies want to install any of this equipment, they pay a tax called a “right-of-way fee” to the state government.
ICYMI: Right-of-way fees were previously state-specific and ranged from ₦4,000 ($9.01) to ₦8,000 ($18.02) until 2017 when the federal government standardised right-of-way fees and set a national standard of ₦145 per metre.
The government is making these efforts to expedite and complete its goals, which are outlined in the National Broadband Plan 2020–2025, to increase internet speed and lower costs in Nigeria.
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In 2018 and 2019, a data breach at Facebook resulted in the leak of user data of over 533 million Facebook users across 100 countries. Malicious users uploaded a large volume of phone numbers to see which ones matched the service’s users in a process called “scraping”.
In 2021, this data, which includes dates of birth, email addresses, locations and phone numbers, was dumped online and made publicly available to anyone.
At the time, Facebook did not classify the data breach as a hack instead called it a scrape to avoid legal sanctions but it appears that hasn’t worked.
Ireland goes green
While Meta stated that it has now removed the ability to scrape away from its platforms, Ireland isn’t convinced Meta has done all it can.
In fining Meta, the DPC stated that the company hadn’t taken enough preventive measures against the scrape. It also charged the tech company with making fewer leaks likely.
Zoom out: So far, the DPC has fined Meta four times with a total of €1 billion ($1.03 billion). In September, it fined Meta €450 million ($467 million) for allowing teenagers set up profiles that displayed contact information on Instagram. At the same time, it also fined WhatsApp €255 million ($263 million) over data infringements and in March 2022, another €17 million fine ($17.5 million) was thrown at Meta for more data breaches at Facebook.
IN OTHER NEWS FROM TECHCABAL
The Next Wave: Investors in Africa’s tech ecosystem are in search of exits.
Applications are open for the UK Research and Innovation African Research Leaders’ Programme. Talented researchers in sub-Saharan Africa leading quality health research in the region can apply to get up to £750,000 in funding. Apply by December 1.
The Fondation Maison des sciences de l’homme and the Institut Français de Recherche en Afrique of Nairobi are offering a three-month-long fellowship in France for postdoc researchers from Kenya, Tanzania, Uganda, Burundi, Rwanda, and Eastern Congo (Kivu) who have presented their thesis from 2017. Laureates will receive a monthly stipend of €1,600 at the start of each month. Apply by December 9.
If your startup or innovation is focused on climate-smart agriculture practices, apply to the THRIVE|Shell Climate-Smart Agriculture Challenge for a chance to win $100,000, a spot in a prestigious accelerator, publicity and more. Apply by December 11.
Applications are now open for Apple’s Entrepreneur Camp. The immersive virtual camp will give founders and developers from underrepresented communities mentorship, technical support and access to the alumni network. Apply by December 5.
Applications are open for the TechBridge accelerator programme to innovative African startups. It provides $200,000 in funding, learning opportunities, and access to the TechBridge hub, community, and support tools and resources. Apply by December 15.
Applications are now open for CyberGirls Fellowship, a free 1-year program that equips girls and women aged 18-28 years old with cybersecurity skills. Apply by December 5.
ATTEND THE ISN ANNUAL GATHERING
Innovation Support Network (ISN), the network of over 120 tech hubs across 25 cities in Nigeria is hosting its 4th Annual Gathering on the 8th of December 2022 in Lagos sponsored by GIZ-DTC and NITDA.