Tuesday, 20 September 2022

Partner(s)

Good morning!

Dennis here,

It is easy to conceive all that is happening in the ecosystem as the antithesis of tech innovative solutions. By "all that is happening," I mean more stringent funding processes, more rigorous licensing processes, a more muscular media with a more aggressive coverage of the ecosystem etc.

What this watershed moment underscores, if you ask me, is an industry that has survived its first phase of development because of the tenacity of its members and their willingness to soldier on.

For the industry to succeed, it must meet international standards. All bad fate actors must be cut out root and stem. The Central Bank of Kenya has taken a bold step licensing only 10 digital lenders from a pool of 288 applicants.

It is easy to see think as making the space unconducive for solutions-driven geniuses. But no party suffers from this decision like the CBK itself, and for many reasons. But most importantly because lesser companies, mean lesser jobs, and lesser revenue for the country.

Below are the tech stories and news you need to know to start your day, carefully curated by Technext.

Summary of the news

The Central Bank of Kenya licensed only 10 digital lenders from a pool of 288 applicants
Bitcoin dropped to its lowest level in 3 months
South Korean prosecutors asked Interpol to issue a red notice for luna tokens' Do Kwon
Google is facing new pressure in India to help curb illegal lending apps

CBK licenses only 10 digital lenders

Following the expiration of the 3-day ultimatum by the Central Bank of Kenya (CBK), 10 digital lenders in Kenya have now been officially licensed to operate in the country. The 10 emerged from a pool of 288 applicants who were directed to submit all required documents to aid the CBK’s licensing review process, TechCabal reports.

Other digital lenders that missed the application deadline have been directed to cease their operations immediately.

Earlier in March, Kenya’s apex bank announced a new set of regulations to guide the licensing and oversight of digital lending providers (DCPs) in the country. Two months later, the CBK issued an official reminder to these lenders, urging them to apply for licensing as that would determine their continued eligibility in the country.

Yesterday, two days since the ultimatum’s deadline elapsed, CBK announced that 10 digital lending companies have received their operating licenses. These are CeresTech Limited, Getcash Capital Limited, Giando Africa Limited (trading as Flash Credit Africa), Jijenge Credit Limited, Kweli Smart Solutions Limited, Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited and Sokohela Limited.

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Bitcoin drops to lowest in 3 months

Bitcoin fell to its lowest level in three months on Monday as investors dumped risk assets amid expectations of higher interest rates, CNBC reports.

The world’s largest cryptocurrency dropped as much as about 5% to hit an intraday low of $18,276, its lowest level since June 19. It was last down 2.9% at $19,166.00. Bitcoin is down 7.2% this month and on pace for the second straight negative month after plunging 15% in August.

“Regulatory pressure, rising base rates, and inflation are pressing heavily on riskier asset classes, especially crypto, and are thus forcing liquidations, reducing capital available for investment, and increasing concerns over undefined regulatory controls,” said Sadie Raney, co-founder and head of operations at Strix Leviathan. “These forces may mute the overall crypto complex until the financial system stabilizes and a regulatory framework becomes more clear.”

Ether also fell a similar 5% to $1,281 apiece Monday, hitting its lowest level since July 15. It was last lower by 1.9% at $1,354.86. It’s currently down 17% this month, on track to post its worst month since June.

Interpol on alert for Do Kwon

South Korean prosecutors have asked Interpol to issue a red notice against Do Kwon, the co-founder of collapsed cryptocurrency operator Terraform Labs, alleging that he is refusing to co-operate with an investigation into the $40bn implosion of the terraUSD and luna tokens, the Financial Times reports.

The Seoul Southern District Prosecutors’ Office said on Monday that it asked Seoul’s foreign ministry to cancel Kwon’s South Korean passport as he was “obviously on the run and has no intention to appear before us for questioning”.

“We have begun the procedure to place him on the Interpol red notice list and revoke his passport,” the prosecutors’ office said, adding that Kwon had not co-operated with investigations into his company’s collapse.

Last week, a South Korean court issued arrest warrants for Kwon and five others connected to Terraform Labs for violating the country’s capital markets laws, saying that they were staying in Singapore.

The prosecutor’s office said that Kwon told investigators through his lawyer that he did not want to respond to their summons immediately.

Prosecutors said he disbanded the South Korean unit of Terraform Labs and left for Singapore at the end of April.

“We are doing our best to locate and arrest him,” a spokesperson for the office said. “He is clearly on the run as his company’s key finance people also left for the same country during that time.”

New pressure for Google in India

Alphabet Inc's Google has been asked by the Indian government and the central bank to introduce more stringent checks to help curb the use of illegal digital lending applications in India, Reuters reports.

Even though Google doesn't fall under the Reserve Bank of India's (RBI) ambit, the U.S. tech giant has been called several times in the last few months to meetings by the central bank and the Indian government and urged to introduce tougher checks and balances that can help in weeding out such apps, according to four sources.

Google said that last year it revised its Play Store developer program policy for financial services apps, including requiring additional requirements for personal loan apps in India effective September 2021.

"We have removed over 2,000 personal loan apps targeting India from the Play Store for violation of the Play policy requirements," a Google spokesperson said, adding that such steps are taken if its policies are violated.