Mariblock Weekly: Shutdowns, partnerships and controversies

Welcome to the first edition of Mariblock Weekly. I’m Ogechi Nelson, a reporter with Mariblock. Once every week, I will send this newsletter to highlight the biggest African blockchain and digital assets stories of the week.

Time to dig in!

While April has seen the announcement of interesting new partnerships that could be pivotal to the future of blockchain and digital assets in Africa, the most dominant stories aren’t so optimistic.

In the first half of the month alone, two cryptocurrency companies — peer-to-peer (P2P) exchange Paxful and payment gateway Lazerpay- seized operations (more below). Now, skeptics are out in full force. There’s a chance to say, “We always knew it was a fad.”

I guess time will tell.

In the meantime, here are some of the biggest stories from Mariblock this week.

Business closures

As I mentioned earlier, crypto companies are shutting down. Three crypto companies have shut down operations in the last three months, citing varying reasons.

• Localbitcoins was the first to bite the dust in February due to “unfavorable market conditions.”
• Paxful followed two months later (on April 4) by shutting its P2P marketplace, citing regulatory and legal issues — and the departure of key employees.
• The most recent is Lazerpay, founded by the Nigerian crypto wunderkind Emmanuel Njoku. The decision came after the company failed to raise funds needed to continue running the company.

On the brighter side, the African blockchain space remains undeterred, with VCs launching funds and companies closing financing rounds and partnerships.

On partnerships

• Jack Dorsey’s Block partnered with Yellow Card, the pan-African crypto exchange, to facilitate cross-border payments in 16 African countries. The World Bank’s recent figures show that remittances to Sub-Saharan Africa cost 8.46% on average — 22.8% higher than the second most expensive region, Europe and Central Asia (excluding Russia). Crypto has been tipped to take that figure closer to 1% or lower.
• Elsewhere, Nigerian venture capital firm EchoVC recently launched an $8 million blockchain fund. The firm says the fund’s focus includes business-to-business infrastructure, decentralized finance (DeFi) and market-making solutions.
• Early-stage investor DFS Lab followed with a partnership with Stellar Development Foundation, the non-profit arm of the Stellar Network, to launch a fund eponymously named the “DFS Lab Stellar Africa Fund I.” They want to support African entrepreneurs building payment solutions on the Stellar blockchain.

On fundraising

• HouseAfrica, a Nigerian blockchain property startup, raised $400,000 for its anti-real estate scam flagship product — Sytemap.
• Also, three African startups were selected as participants for the fifth batch of CV Labs’ blockchain accelerator program. CV Labs tend to invest up to $135,000 in participating startup via its venture capital arm, CV VC.

A bit of controversy

• Worldcoin, a blockchain-based digital identity and cryptocurrency platform, has fully made its digital identification services available in Kenya. The project, co-founded by ChatGPT’s Sam Altman, wants to create a digital identity for everyone in the world.
• But how? The Worldcoin app supposedly rewards users with crypto for scanning their iris (a part of the eye). The company says it stores the ID data on the blockchain, which should mean strong security.
• However, the Institute of Electrical and Electronics Engineers alleged that Worldcoin has developed a system for third parties to leverage its register of individuals for a host of identity-focused applications. This presents a concern about whether the users’ data is indeed safe.

On the regulatory front

• Officials in Seychelles said they’re looking to develop a policy on virtual assets. The ensuing legal framework will introduce legal provisions for registering crypto businesses.
• Of note: an official said local and international bodies have requested information on various companies registered in Seychelles conducting “illegal activities using cryptocurrency.”