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Thailand warns Facebook to tackle Crypto-related Scams, As Cheongju in South Korea to Seize Crypto from Tax Evaders

By
Paul Ugbede Godwin
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0

The Thai government has issued a stern warning to Facebook, the social media giant, to take action against the rampant cryptocurrency scams that are plaguing its platform. The Ministry of Digital Economy and Society (MDES) said that if Facebook fails to comply with its request, it could face a possible shutdown in the country.

According to the MDES, there are more than 600 Facebook pages and groups that promote fraudulent schemes involving cryptocurrencies, such as fake initial coin offerings (ICOs), Ponzi schemes, and phishing attacks. These scams have caused significant losses to unsuspecting investors and damaged the reputation of the legitimate crypto industry in Thailand.

The MDES said that it has repeatedly asked Facebook to remove or block these pages and groups, but the company has been slow or reluctant to do so. The ministry said that it has the legal authority to order internet service providers to shut down access to Facebook if it continues to ignore its warnings.

The MDES also urged the public to be vigilant and report any suspicious activities related to crypto scams on Facebook. The ministry said that it is working closely with the Securities and Exchange Commission (SEC), the Bank of Thailand (BOT), and other relevant agencies to combat the crypto fraud problem and protect the interests of the Thai people.

The city of Cheongju in South Korea has announced a new policy to crack down on tax evaders who hold cryptocurrency assets. According to a press release from the city government, the policy will allow the authorities to seize crypto assets from delinquent taxpayers, even if they are stored in digital wallets or overseas exchanges.

The policy is based on a legal interpretation that crypto assets are intangible property that can be confiscated by the state. The city government said that it has identified 1,566 individuals who owe more than 10 million won ($8,500) in taxes and have crypto holdings. The authorities will use various methods to track down their crypto assets, such as requesting information from local exchanges, analyzing transaction records, and collaborating with foreign agencies.

The city government said that the policy is aimed at creating a fair and transparent tax system and preventing tax evasion. It also said that it will provide guidance and education to taxpayers on how to properly declare and pay taxes on their crypto income. The policy will be implemented from September 2023.

The policy is the latest move by South Korea to regulate the crypto industry and collect taxes from it. The country has introduced a 20% tax on crypto profits above 2.5 million won ($2,100) starting from January 2024. It has also required all crypto exchanges to register with the financial authorities and comply with anti-money laundering rules by September 2023.

Crypto taxation is one of the most important and urgent issues that need to be addressed in South Korea. The current tax regime is complex, ambiguous and inconsistent, and creates a lot of uncertainty and confusion for the crypto community. By adopting more clear and consistent definitions, harmonizing tax rates and thresholds, and coordinating between national and local tax authorities, South Korea can improve its crypto taxation system, and foster a more conducive environment for the development and adoption of blockchain technology and digital assets.

Appeal to Remove Sanctions on Tornado Cash Denied Amid SEC Filing on Titan Global Capital Management

By
Paul Ugbede Godwin
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0

The US Federal Court has rejected the appeal of Tornado Cash, a decentralized privacy protocol, to lift the sanctions imposed by the Securities and Exchange Commission (SEC) for violating the securities laws. The court ruled that Tornado Cash failed to demonstrate that the sanctions were arbitrary, capricious, or an abuse of discretion.

Tornado Cash is a protocol that allows users to send and receive Ethereum transactions anonymously, using zero-knowledge proofs and smart contracts. The SEC alleged that Tornado Cash sold unregistered securities in the form of governance tokens (TORN) to US investors, without complying with the disclosure and registration requirements. The SEC also claimed that Tornado Cash misled investors about the risks and rewards of using the protocol, and that it operated as an unlicensed money transmitter.

In response, Tornado Cash filed an appeal to the Federal Court, arguing that the SEC had no jurisdiction over its activities, that TORN tokens were not securities, and that the sanctions were excessive and unjustified. Tornado Cash also claimed that the SEC violated its due process rights by freezing its assets and preventing it from accessing its legal counsel.

However, the Federal Court dismissed these arguments, finding that the SEC had sufficient evidence to support its allegations, and that Tornado Cash did not show any error or abuse of discretion in the SEC’s decision. The court also noted that Tornado Cash did not cooperate with the SEC’s investigation, and that it continued to operate its protocol despite the sanctions.

The court’s ruling is a setback for Tornado Cash and its supporters, who hoped to challenge the SEC’s authority over decentralized protocols. It also signals that the SEC is determined to enforce its regulations on the emerging crypto industry, regardless of its claims of decentralization and privacy.

In a similar twist, the Securities and Exchange Commission (SEC) has filed a complaint against Titan Global Capital Management LLC, a hedge fund manager based in New York, and its principals, alleging that they engaged in a fraudulent scheme to inflate the value of their funds and mislead investors.

According to the SEC, Titan and its principals misrepresented the performance and assets of their funds, which invested in distressed debt and private equity. The SEC claims that Titan used fake documents, sham transactions, and inflated valuations to create the illusion of high returns and attract new investors.

The SEC also alleges that Titan misappropriated investor funds for personal expenses, such as luxury cars, jewelry, and vacations. The SEC further alleges that Titan failed to disclose material conflicts of interest, such as Smith’s ownership of a company that received fees from Titan’s funds.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Titan and its principals with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and other relief. The SEC’s investigation was conducted by the New York Regional Office and the Asset Management Unit.

The SEC’s order [PDF] states:

Titan did not disclose in the advertisements that the 2,700 percent annualized return was based on a purely hypothetical account in which no actual trading had occurred, that this annualized return had been extrapolated from a period of only three weeks (from August 10, 2021 to August 31, 2021), that the hypothetical return for this three-week period was calculated at 21 percent, that the projected 2,700 percent annualized return was based on the assumption that the Titan Crypto strategy would continuously generate a 21 percent return every three weeks for an entire year, or Titan’s views as to the likelihood that this assumption would bear out.

WhatsApp Rolls Groups Without Names, Netflix crackdown Continue to Pay off

By
Ojukwu Emmanuel
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0

Meta-owned social messaging platform WhatsApp, has today launched a new feature that lets users create groups on the app without needing to name them.

Meta CEO Mark Zuckerberg, announcing the update, said the feature will help users create a group, even if they have not decided on a topic yet or need to create one quickly.

He wrote,

“Making it simpler to start WhatsApp groups by naming them based on who’s in the chat when you don’t feel like coming up with another name,” he wrote on Facebook, sharing a picture of how the new groups will look.

However, unlike a typical WhatsApp group that can add up to 1,024 participants, the messaging app confirmed that unnamed groups will be limited to up to six participants. These groups will be dynamically named based on the users added to a group, the company says.

Notably, the group name will appear differently for each participant, depending on how they have saved contacts on their phone. If a user joins an unnamed group with people who haven’t saved their contacts, their phone number will be visible in the group name.

This indicates that the feature is likely aimed more at friends and family who are already familiar with one another. Meanwhile, if someone is added to a group with people who don’t have that person saved, then their phone number will show instead.

Meta plans to roll out this feature globally over the next few weeks. It is one of a number of updates that have been added to WhatsApp in recent weeks.

The social messaging app has continued to introduce a range of updates and new features aimed at improving user experience and functionality. The company is also quietly working on other features, including the addition of generative AI to create new stickers just by describing them.

Acquired by Meta in 2014, WhatsApp has amassed over 2 billion monthly active users worldwide. It has become one of the most popular messaging apps globally, used for both personal and business communication.

Despite lagging adoption in the United States, WhatsApp has seen significant growth among Gen Z, students, and early adopters. In particular, the app is extremely popular among Latino communities.

The app’s simple and user-friendly interface has made it a favorite among users of all ages. Lately, WhatsApp has been pushing deep into the business messaging market with WhatsApp for Business, which enables users to have a business presence on the platform.

It has become a go-to platform for small business owners who personally manage conversations with customers. From banking, e-commerce, and more, WhatsApp helps businesses drive results.

Meanwhile, sometimes we overrate customers and how they will react, as we learn that Netflix has continued to sign-up new customers: “Rather than inspire backlash from users as some Wall Street analysts feared, Netflix’s May crackdown on password sharing appears to be netting the company new sign-ups.”

Rather than inspire backlash from users as some Wall Street analysts feared, Netflix’s May crackdown on password sharing appears to be netting the company new sign-ups. According to data from the research firm Antenna, the streaming giant continued to add new U.S. users through July, with about 2.6 million people signing up for the service last month — more than any other paid streaming service. Though July’s subscriber additions represent a 25.7% decline from their June peak, Antenna researchers say the numbers are still above normal, setting expectations for another quarter of strong growth.

Some 100 million households had shared account credentials, Netflix estimates, leading to projections that 50 million new accounts will ultimately be created.

Approximately 23% of new users in July subscribed to the lowest-priced, ad-supported tier.

The Big Plot in Nigeria’s Stock Exchange: Investing and Trading in US Dollars

By
Ndubuisi Ekekwe
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0

Hello Tekedia Capital members: the Nigerian stock exchange wants to do what we discussed when it approached us to list some of our portfolio firms in the NGX Tech Board. Yes, our members voted down that option, sending a message to the bourse in an unambiguous way: our startups will consider listing in NGX if you have an option for the deals to be done in both Naira and USD. In other words, people can invest and buy shares in both Naira and USD!

Today, that playbook seems to have gotten an interest: “The Nigerian stock exchange is proposing the inclusion of listings for bonds denominated in dollars, which could potentially extend to stocks as well. The primary objective is to facilitate enhanced foreign currency access for companies operating in the country, according to a Bloomberg report.”

The initiative is being touted to augment other measures announced by the Central Bank of Nigeria (CBN), in the wake of its fresh fight to stop the naira from free-falling in the forex market.

Temi Popoola, the CEO of Nigerian Exchange Ltd., said the focus is on enterprises based within the nation’s special economic free trade zones, as well as those generating foreign currency, per Bloomberg.

“Our primary objective is to enable these companies to issue bonds denominated in dollars and eventually offer equity in dollars as well,” he said in an interview. “It could potentially address the challenges posed by fluctuations in foreign currency.”

Yes, foreign companies which want to invest in Nigerian companies do not need to convert to Naira in the NGX, rather, they can have the option to invest directly in USD. We approve this message because it will help deepen liquidity of US dollars in Nigeria, and help the Naira to strengthen.

Sure, you may argue that as a sovereign nation that Nigeria should not undercut the Naira. That is fair, but for those startups which must pay for APIs, cloud services, etc in USD, anything but USD makes things very challenging! And if you look at this broadly, this can help stabilize the Naira which means a win-win for all.

If you allow Company A to list 20% of its stock in USD and others in Naira, it can raise the 20% to seed a manufacturing boom with USD available to import things. Do not discard this idea. It is key to understand that more than 90% of leading startups in Nigeria price their companies in USD and most have bank accounts in US and UK where that money is paid and kept. If you can convince them to share a small part so that the funds are no more in US and UK, but in Zenith Bank, Fidelity, GTB, etc, you help Nigeria.

Yes, tech valuation and fundraise are already dollarized because the dollar men bring the money as we like our cement, industrials and FMCGs in NGX. This policy is to bring that fund to Lagos.

I understand the patriotism element which is valid. This is a key component. Today, no one can start a decent manufacturing firm which needs imported raw materials in Nigeria because of lack of USD. I hope we look deeper to understand that when other options are limited, anything that can kickstart making things in Nigeria should be evaluated.

My Response: Why do you think that all funds must go through I&E window? If I do IPO and receive $1m and want to pay for my AWS cloud services, why do I need to go to I&E when I have funds in my Fidelity dorm account?

Comment 1: This is a selfishly formulated policy,Jumia was listed on the NYSE and investors globally(Africans inclusive) invested with dollars not with their local currencies,

If Nigerian tech startups need dollar inflow via sale of shares,they should get listed on the NYSE, not on NGX

Buying Nigerian tech stock listed on the NGX in dollars is a bad idea and I will be glad to see that this idea doesn’t fly.

Comment 1R: Absolutely! Why dollarise our economy when it is not a legal tender by law! Ndubuisi Ekekwe , I don’t support this your new idea but love the other idea where you stated that only manufacturing goods can save the Naira!

My Response: “other idea where you stated that only manufacturing goods can save the Naira!” – unfortunately, you need to kickstart that process since with Naira you cannot even import raw materials. If you allow Company A to list 20% of its stock in USD and others in Naira, it can raise the 20% to seed that manufacturing boom. Do not discard this idea. It is key to understand that more than 90% of leading startups in Nigeria price their companies in USD and most have bank accounts in US and UK where that money is paid. If you can convince them to share a small part so that the funds are no more in US and UK, but in Zenith Bank, Fidelity, GTB, etc, you help Nigeria.

Yes, tech valuation and fundraise is already dollarized because the dollar men bring the money as we like our cement, industrials and FMCGs in NGX. This policy is to bring that fund to Lagos.

The Nigerian Stock Exchange Proposes Dollar Asset Listing to Tackle its FX Crisis – Bloomberg

By
Samuel Nwite
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0

The Nigerian stock exchange is proposing the inclusion of listings for bonds denominated in dollars, which could potentially extend to stocks as well. The primary objective is to facilitate enhanced foreign currency access for companies operating in the country, according to a Bloomberg report.

The initiative is being touted to augment other measures announced by the Central Bank of Nigeria (CBN), in the wake of its fresh fight to stop the naira from free-falling in the forex market.

Temi Popoola, the CEO of Nigerian Exchange Ltd., said the focus is on enterprises based within the nation’s special economic free trade zones, as well as those generating foreign currency, per Bloomberg.

“Our primary objective is to enable these companies to issue bonds denominated in dollars and eventually offer equity in dollars as well,” he said in an interview. “It could potentially address the challenges posed by fluctuations in foreign currency.”

Nigeria has been battling to tame its forex crisis, which has seen the naira plunged to N950/$1 in the parallel market. The naira’s free fall is largely tied to low FX earnings from oil exports due to low oil outputs.

Following the inauguration of his administration on May 29, President Bola Tinubu has initiated some reforms, including the removal of fuel subsidies that gulped more than $10bn from the 2022 budget, and the floating of the FX market. However, the reforms have accelerated the naira’s fall, spiking inflation – which hit 24.08% in July.

This backdrop created an urgent need for the government to provide short-term solutions to the volatility of the FX market. While a solution to the crisis impeding oil output remains farfetched, the government is exploring other mechanisms through policies to boost the naira’s value.

Last week, the Nigerian National Petroleum Company Limited (NNPCL) announced that it has secured $3bn emergency crude oil repayment from Afreximbank. The loan is targeted at boosting Nigeria’s foreign reserves, which according to estimates by JPMorgan, have been depleted to $3.7bn – far below the $37bn that the CBN has been posting.

The CBN also announced other policy changes, including new rules for the Bureau De Change operators, which typically brought them back into Nigeria’s regulated FX market.

But despite these efforts, the naira has resumed its woeful performance after making a little gain trading at N840/$1 in the parallel market and N770/$1 at the Investor & Exporter window. As of Wednesday afternoon, the naira was trading around N925/$1 in the parallel market and N769.23 in the I&E window.

This new proposal by the government is seen as bait designed to draw companies and individuals, who keep funds in dollars as a hedge to naira’s volatility, into making them available.

Per Bloomberg, Popoola refrained from specifying a timeframe for the potential implementation of these proposals. However, he noted that the government’s demonstrated interest in comprehensive market reforms is apparent. He said changes to listing regulations can be achieved within a “relatively short time.”

Popoola said in addition to facilitating the listing and issuance of foreign-currency bonds, the stock exchange is collaborating with the domestic Securities and Exchange Commission to revise regulations. This aims to enable specific companies to distribute dividends in dollars.

“Given the proactive stance of the current administration, it is reasonable to anticipate that these objectives can be achieved,” he said.

He noted that both retail and institutional investors possess substantial quantities of dollars that domestic capital markets can leverage to promote increased participation in local listings.

“If the target companies cannot access dollars within our market, many of them may opt to list abroad,” he said.

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