Kenya Shuts Down Bank Accounts of Bitcoin Startups, Minister Can’t Sell BitPesa Shares

Kenya Ministry of Communications and Information Technology minister Joe Mucheru is unable to sell his shares in BitPesa after the federal government imposed tightened regulations on virtual currency.

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Kenya Shuts Down Bank Accounts of Bitcoin Startups, Minister Can’t Sell BitPesa Shares

Kenyan Ministry of Communications and Information Technology minister Joe Mucheru is unable to sell his shares in BitPesa after the federal government imposed tightened regulations on virtual currency.

Mucheru, former director of BitPesa and one of the company’s few shareholders, stated during an interview that Kenyan financial regulators forced financial institutions to shut down the bank accounts of prominent Bitcoin startups such as BitPesa.

Such regulatory policies have disallowed shareholders like Mucheru to sell his stake of the company and have made it that much more difficult for investors to find potential buyers.

Mucheru said:

“I cannot find a buyer. The sale fell through. Due to changes in CBK policy on digital frequencies, all bank accounts were closed and the business in Kenya effectively closed.”

Obscurity in Mucheru’s Claims

One undetermined aspect of Mucheru’s claims is, BitPesa is an international company that operates in various African countries and regions outside of Kenya. Thus, even if Kenyan regulations shut down BitPesa in Kenya, Mucheru should be able to sell his shares of the company to other willing buyers in regions including Nigeria, Tanzania, Uganda.

Furthermore, BitPesa has offices and staff members in London and San Francisco apart from its main team in its headquarters located in Kenya’s capital city, Nairobi.

Understandably, Mucheru was elected in December 2015 to become an information minister for the ICT of the Kenyan government. While the impact of the Central Bank of Kenya (CBK)’s warning against Bitcoin and other virtual currencies on the cryptocurrency ecosystem of Kenya is still not clear, Mucheru’s claims can be represented as the local government’s method of strengthening their regulations on Bitcoin.

The Central Bank of Kenya as well as other government-supported agencies have tightened the regulations on Bitcoin after BitPesa’s legal battle with Safaricom. The government feared that Bitcoin and BitPesa’s innovative and efficient payment networks would impose threats on existing regulated financial services such as M-Pesa and Airtel.

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