A popular cryptocurrency exchange in Kenya has warned its clients against trading cryptocurrencies, amidst a renewed crackdown by the country’s central bank on the growing digital currency market in the country.
Kenya’s Central Bank has issued a warning to banks against dealing with cryptocurrencies and warned that the financial sector is facing a major threat of fraudsters who are using cryptocurrencies to defraud clients. “I think the Central Bank of Kenya is misinformed, very misinformed. They have been misinformed for a very long time,” said George Sibomana, Chief Executive Officer of bitquick , a US company that offers Bitcoin exchanges and loans to customers. “I think they are being used as a scapegoat to bring down the cryptocurrency space and it is extremely unfortunate,” he said.
A group of American investors, including a former JPMorgan executive, have sent a stern warning to their clients to be on the lookout for cryptocurrency scams after falling prey to one such scam that reportedly took millions of dollars from the unsuspecting investors.. Read more about what is crypto trading and let us know what you think.Several Kenyan banks have started sending out warnings to customers involved in cryptocurrency trading to be wary of the risks involved. These warnings were reportedly sent to customers who used their credit and debit cards to buy cryptocurrencies on cryptocurrency exchanges.
Risks of trading crypto currencies
According to a local report, one bank, NCBA Bank Kenya, is now advising its customers not to buy, hold or trade virtual currency. In a warning to customers who have previously traded on cryptocurrency exchanges, NCBA Bank said: According to Central Bank of Kenya (CBK) Circular No. 14 of 2015, virtual currencies such as bitcoin are not legal tender in Kenya. Therefore, there is no protection for you as a customer in the event that the platform on which the cryptocurrencies are stored or traded fails or is interrupted. In the warning email, NCBA Bank repeats the usual phrases central banks use to discredit digital currencies. For example, NCBA Bank states that transactions in virtual currencies are largely untraceable, making them vulnerable to abuse by criminals.
Unregulated crypto currency exchanges
It also warns that cryptocurrencies are traded on exchange platforms that are not well regulated, and that consumers risk losing all their money if these exchanges collapse or the companies shut down. Although NCBA Bank customers can still make transactions with cryptocurrency exchanges, the bank warns that it does not approve cryptocurrency transactions. At the same time, the report suggests that the banks’ recent actions could mean that the CBC is still hostile to cryptocurrencies. For example, in 2015, the central bank issued a notice asking Kenyans not to trade in cryptocurrencies. Similarly, in April 2018, the CBC warned banks about transactions involving cryptocurrencies. However, despite these warnings, cryptocurrency trading in Kenya continues to grow and according to some reports, the country is now the second largest peer-to-peer trader on the continent. It remains to be seen whether the measures taken by Kenyan banks will curb cryptocurrency trading volumes. What do you think about the decision of Kenyan banks to warn their customers against trading in cryptocurrencies? You can share your thoughts below in the comments section. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The Kenya Commercial Bank has held a meeting with its clientele, warning them that cryptocurrency trading is a high-risk activity and could be a source of loss. The bank’s Chief Operations Officer, Salim Mohamed, told the audience that the bank is not in the business of providing these services, and that they are not aware of any client currently operating a trading activity.. Read more about future of cryptocurrency 2021 and let us know what you think.
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