July - Regulatory Roundup

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July has come to end, and that means we have another roundup of regulatory news and updates about the latest in the fintech ecosystem! The month showcased a number of interesting court cases and witnessed numerous startups securing funding for their ventures. Join us as we explore the regulatory landscape in Nigeria, Africa, and the globe in six captivating headlines!

News in Nigeria

The CBN allows Nigerians to receive foreign currency in Naira

In June 2023, the CBN floated the naira thereby creating only one exchange window which is the I&E window. This was followed by a new CBN regulation that enables International Money Transfer Operators (IMTOs) to payout their foreign currencies to beneficiaries in Naira. Since then, most banks have increased their spending limit from $20 and international transactions are now easier.?

N120m fine imposed on Stanbic IBTC by the Competition and Consumer Protection Tribunal (CCPT)?

The Consumer Competition and Protection Tribunal (CCPT) imposed a N120 million naira fine on the well-known Stanbic IBTC Bank. This penalty was issued because the bank was found to have neglected to process a NIBSS Instant Payment transfer request promptly and unlawfully held the consumer's funds beyond the stipulated 10-minute reversal regulation for failed NIBSS Instant Payment electronic funds transfer.

Binance to temporarily halt its support for selected Multichain-Bridged Tokens

Binance, the popular cryptocurrency exchange, has announced that it will be suspending? deposits and withdrawals of certain Multichain-bridged tokens from July 7, 2023 until further notice.The affected tokens and their respective networks can be found here. Notably,? Binance users will still be able to deposit or withdraw these tokens via other networks supported by Binance.

The CBN unfreezes the bank accounts of the Fintech Investment Firms

The CBN has directed the unfreezing of bank accounts belonging to prominent fintech investment firms, including Bamboo, Risevest, Chaka, and 437 other companies. These accounts had been subjected to a post-no-debit restriction, which blocked any debit transactions and prevented withdrawals on the account. The reason behind the initial freezing was due to the CBN's accusation that they were operating without the required license.?

The CBN has increased the benchmark interest rate from 18.5% to 18.75%

The Central Bank of Nigeria's Monetary Policy Committee (MPC) has taken action to address the country's surging inflation rate by increasing the benchmark interest rate, a.k.a the monetary policy rate (MPR) to 18.75% from its previous 18.5%. We wonder how Nigerians will react to this since a higher MPR means more expensive borrowing costs.

The CBN sued for its new social-media KYC requirements for Financial Institutions

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the CBN at the Lagos Federal High Court. The advocacy group seeks to withdraw the regulation that compels financial institutions to collect customers' social media handles because it does not serve any legitimate purpose. This legal action followed SERAP's warning to the central bank a month prior, where they gave a three-day deadline to withdraw the regulation to avoid facing legal consequences.

NITDA set to build Nigeria’s first cybersecurity lab

The National Information Technology Development Agency (NITDA) has announced its intention to establish a cybersecurity lab in 2024 in collaboration with the Chartered Institute of Forensic and Certified Fraud Investigator of Nigeria (CIFCFIN). The purpose of this is to counter cybercriminals who employ advanced research and technology for their attacks. Though NITDA has invested in technology like the Digital Fabrication Lab (FABLAB 1.0), the new lab is yet to be built.?

The FCCPC’s legal battle with Sycamore

On July 20, the Federal Competition and Consumer Protection Commission (FCCPC) deregistered Sycamore Integrated Solutions Limited, a digital money lender, and removed their app 'Get Loan' from the Google Play Store due to alleged illegal practices. However, Sycamore has denied the accusations, claiming the FCCPC did not carry out a thorough investigation before moving ahead to link them with Get Loan which they claim was an impersonator. We are yet to hear the FCCPC’s response to this.?

The CBN Introduces New Corporate Governance Guidelines for Financial Institutions

The CBN released corporate governance guidelines for commercial banks, financial holding Companies (FHCs), merchant banks, non-interest and payment service banks. The circular provides new regulations for the officers of these financial institutions and any breaches of? the guidelines will lead to a suspension for six months in the first instance and possible removal from the board or employment. You can find the guidelines here.

The NCC and NDPA Data Protection Regulations

Shortly after the Nigerian Communications Commission’s (NCC) consultation regarding its data protection regulations, it was revealed that the Nigeria Data Protection Act (NDPA) and the draft Regulations present a number of contradictions. From contradictions regarding the processing of personal data of children aged 13 and above to issues regarding data portability. These conflicting provisions pose serious challenges for data protection in Nigeria, and we are waiting to see how the administrative bodies will address such conflict.

Across Africa

Uganda is taxing its digital economy.

The Ugandan President has passed an Income Tax Bill that imposes a 5% Company Income Tax on foreign companies operating in Uganda. Uganda has also joined the league of countries, like Nigeria, which imposed a 6% income tax on foreign entities with significant economic presence.?

Starlinks is live in Kenya?

Starlinks is expanding its African reach and Kenya is the latest country to join the list. Kenyans can now get Starlinks by paying Ksh6,500/month ($45.9) for the broadband internet service and Ksh92,000 ($649.72) for the one-time hardware.?

Safaricom is looking to be a worthy contender? for satellite data services.?

Safricom, one of the biggest mobile network operators in Kenya, has partnered with AST space mobile to launch its satellite internet services. The innovative AST technology is compatible with regular smartphones so Kenyans don’t need to buy new devices. Well nothing makes the market fun like a little competition. We’ll be on the lookout.?

It’s another suit against Google?

Lottoland, a South African Gaming Company, has submitted an “abuse of dominance” complaint to the South African Competition Commission. The complaint alleges that Google has limited Lottoland's access to its advertising services. In response to this alleged restriction, Lottoland is seeking relief from the Commission to direct Google to grant them access to their advertising services while the case is under consideration. They have committed to paying and complying with all relevant rules during this period.

Kenyan Courts decline ARA’s request to withdraw Flutterwave’s case?

In 2022, Flutterwave was accused of fraud and money laundering in Kenya by the Asset Recovery Agency (ARA). As a result, their accounts were frozen, and a prolonged trial ensued. Recently, a Kenyan judge declined the ARA's bid to drop the case against Flutterwave. The judge insisted on receiving evidence for the withdrawal request and demanded an affidavit from the ARA CEO or a high-ranking official before considering closing the case.

Apple to alter its app prices in Nigeria, Egypt and Tanzania

Apple has announced that it will implement changes to its pricing and in-app purchases in the Nigeria, Egypt, and Tanzania App Stores starting from July 25, 2023. While Apple did not explicitly state whether the changes would be upward or downward, they cited the introduction of Value Added Tax (VAT) and increased taxes in these countries as the reasons behind the modifications.

The Kenyan High Court indefinitely suspends the Kenya Finance Act 2023

Kenya's taxation plans have encountered a setback as the High Court suspends the Finance Act 2023 again. The Act, which was proposed in May 2023, included amendments to tax content creators, influencers, and crypto traders. After facing public opposition and undergoing minor adjustments, the Bill was officially enacted in June 2023. However, its legality has been challenged, and Senators have filed a suit asking that the Act remains suspended.

The Information Regulator places hefty fine on South Africa’s Department of Justice

South Africa's Information Regulator has placed a R5 million fine on the Department of Justice and Constitutional Development due to its failure to respond to the regulatory enforcement notice regarding a ransomware attack in 2021. The department now has three options to handle the fine: pay within 30 days, negotiate a payment plan with the regulator, or face prosecution for violating the Protection of Personal Information Act (POPIA).

Google joins South Africa’s AI Association?

Google has become the newest member of the South African Artificial Intelligence (SAAIA). The SAAIA is an association that aims to promote responsible AI adoption for the benefit of South Africa's citizens through investments, equal opportunities, trading and economic growth.

Across the World

The Microsoft and FTC debacle continues

The court in the United States has declined the Federal Trade Commission’s preliminary injunction? to prevent? Microsoft from closing the acquisition deal? with Activision Blizzard. Although Microsoft has won this case in the US, it still has to contend with a myriad of other regulatory scrutiny.?

Amazon denies being a “Very Large Online Platform”?

Last year, the EU issued the Digital Services Act (DSA) with the aim of creating a safer online environment for consumers. The DSA requires Very Large Online Platforms (VLOPs) to comply with most rules, but Amazon has been trying to delay its compliance with the DSA's law with claims that its not a 'very large online platform' .This raises concerns about the definition of VLOPs and their accountability. We are concerned whether Amazon's challenges could undermine this legislative win for consumer protection.

Crypto Scoop

Crypto Exchange platform, Bundle, shuts down its operations amidst challenges faced by the 2022 FTX collapse

After three years of operation, Bundle Africa, the African crypto exchange, has made the announcement to shut down. The company's focus will now be on expanding Cashlink, its P2P payment network, to benefit the Web3 and blockchain community. The decision comes amid challenges experienced by crypto exchanges since the FTX collapse in 2022. Now we are left wondering will other crypto exchanges survive this crypto winter?

Namibia introduces new cryptocurrency laws?

Namibia has officially passed a bill legalizing and regulating virtual assets, including cryptocurrencies. The new law establishes a regulatory authority responsible for? licensing virtual asset service providers (VASPs) and monitoring all related activities. Despite the benefits of the new law, the Bank of Namibia has informed the public to be careful since virtual assets are not considered legal tender, but has the? potential in promoting financial inclusion and enhancing payment systems.

South African crypto exchanges can no longer operate without a license

South Africa's Financial Sector Conduct Authority (FSCA) has introduced a new crypto regulation that will require all crypto exchanges operating in the country to obtain licenses by November 30 2023. The FSCA has already received around 20 license applications since the commencement of the exercise. We urge all crypto exchanges in SA to comply with the deadline as non-compliance could result in fines or closures.??

Binance to temporarily halt its support for selected Multichain-Bridged Tokens

Binance, the popular cryptocurrency exchange, has announced that it will be suspending? deposits and withdrawals of certain Multichain-bridged tokens from July 7, 2023 until further notice. The affected tokens and their respective networks can be found here. Notably,? Binance users will still be able to deposit or withdraw these tokens via other networks supported by Binance.

The Kenyan ODPC warns against using Worldcoin

Worldcoin, the international cryptocurrency agency, has been criticized by the Kenya Office of the Data Protection Commissioner (ODPC) for asking users to scan their eyeballs to be verified for free tokens . The ODPC warned users against it, stating that they are collecting sensitive personal data in a questionable manner. Basically, use it at your own risk.

Deals and Raises

Rwandan online retail platform, Kasha, raises $21 million in Series B funding?

Rwandan online retail platform, Kasha, has secured $21 million in a Series B funding led by Knife Capital. The funds will be used to fuel growth and expansion, with plans to enter South Africa and West Africa in 2023. Kasha has the goal of aggressively expanding its customer base, going global, and eventually going public. We look forward to seeing their progress.

Clafiya raises $610,000 in pre-seed funding round!

Nigerian healthtech startup, Clafiya, has secured $610,000 in pre-seed funding to fuel its expansion and achieve its corporate objectives. The funding was raised from a mix of venture capital funds, angel investments, and grants from firms like Norrsken Accelerator, Acquired Wisdom Fund (AWF), Microtraction,? and several angel investors. We look forward to seeing the progress and impact of Clafiya's journey in the healthtech industry.

Nigerian insurtech startup, MyCover.ai, secures $1.25 million in a pre-seed round

MyCover.ai has secured $1.25 million in a pre-seed round led by Ventures Platform. The startup streamlines the claims process for insurance companies and end users. It collaborates with insurance companies like Hygeia, AIICO Insurance, and Allianz through its open insurance API. With the newly raised funds, the startup plans to strategically expand into other African markets and invest in its proprietary technology.

Propel, Nigerian Startup, raises over $2 million in seed funding

Propel has raised $2.74 million to further its platform. Propel champions diversity and inclusion by providing a means for talent in? tech communities to gain access to multiple skill sets from software development to design, data science to no-code, and other digital transformation skills. This is good news for the HR tech community.

Egyptian fintech company Flash raised $6 million in a seed round

Egyptian fintech startup, Flash, has raised $6 million in a seed funding round led by Addition to fuel its customer base growth, product development, and business expansion within Egypt. This milestone follows Flash's approval by the Central Bank of Egypt as a technical payment aggregator. We are excited to see how Flash makes payments easier for their customers in Egypt!

Mergers and Acquisitions

Access Bank? to acquire the sub-saharan subsidiaries of Standard Chartered Bank

Standard Chartered has finalized an acquisition deal, selling its shareholding in subsidiaries located in Angola, Cameroon, Gambia, and Sierra Leone, andTanzania to Access Bank. The acquisition is part of Standard Chartered's global strategy aimed at streamlining operations, reducing complexity, and driving scale. However, we should note that the deals are subject to regulatory approvals in countries where Standard Chartered operates such as approval from the Central Bank of Nigeria and the Angolan Competition Authority.?