Cryptocurency

Zambia cracks down on crypto companies

October 20, 2018
The Main Bloq

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Zambia cracks down on crypto companies

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender
Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

The Bank of Zambia has started to clamp down on cryptocurrency-related businesses, mere days after declaring that it does not view digital coins such as BTC as legal tender. The crackdown began on Oct. 14, when the central bank announced an investigation into Heritagecoin Resources Ltd. for allegedly laundering money, according to local media reports.

Also read: Zambian Central Bank Declares Bitcoin is Not Legal Tender

Bank of Zambia Probes
Heritagecoin’s Deposits Business

In addition to the ongoing probe, the Lusaka-based fintech startup faces allegations that it has taken on traditional banking activities, such as accepting deposits — something it is not certified to do.

“The company … has since been offering financial services and collecting deposits from members of the public,” Kamufinsa Manchishi, a spokesperson for the Zambian Drug Enforcement Commission, told the Lusaka Times. The organization, which is assisting with the investigation into Heritagecoin, did not reveal the amount of money involved.

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

Manchishi added that: “As such, the commission together with the Bank of Zambia (BoZ) are currently investigating the company for activities contrary to the Prohibition and Prevention of Money Laundering, as well as the Banking and Financial Services Acts.”

On Friday, the BoZ declared that cryptocurrencies such as BTC are not legal tender, warning that those conducting transactions in the cryptocurrency would have nobody to turn to or blame in the event of market failure. However, it appears that the bank issued the decree solely because it wants to promote its depreciating fiat currency, the kwacha.

That said, the central bank has neither the power nor the legal backing to shut down the nascent Zambian cryptocurrency market. The BoZ would need parliament to amend the law that enabled its own establishment for it to be able to claim any authority over cryptocurrency investments or trading.

Nonetheless, the BoZ does have full control of the banking sector within which Heritagecoin…

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