This analysis warns that Kenya’s fast-growing crypto scene is drawing in projects that want public money without enough scrutiny. The concern is not blockchain itself, but the way some ventures package tokens as investment opportunities.
Across recent months, the market has seen more launches of crypto-coins and token sales pitched to the public. These offerings are usually presented through a white paper that explains the project, names the leadership and developer teams, and invites buyers to purchase tokens at a low price.
The funding model is commonly described as an Initial Coin Offering, or ICO. It resembles an Initial Public Offering in one respect: both are used to raise money from the public. But the comparison ends there. Unlike IPOs, ICO buyers do not receive ownership rights, voting power over directors, or access to company records.
In practical terms, buying into a crypto-project does not mean owning part of the business behind it. The value depends on whether the project later gains real-world use and whether demand for the token rises enough to support resale into fiat money.
The article notes that Kenya has not been left out of this trend, with local actors also entering the crypto market. That growth has taken place in an environment where there are still no official guidelines or regulations governing the space.
Dr. David Ndii has been on record saying the crypto-economy is “one big sham or pyramid scheme” that is likely to collapse in the near future. Dr. Patrick Njoroge, the Central Bank of Kenya governor, was initially sceptical about cryptocurrencies, though he later tweeted about blockchain features that could be useful in financial markets.
Against that backdrop, the piece advises would-be investors to ask two questions before supporting any project. First, what real problem is the project trying to solve, and why does it need a crypto-coin at all? Second, what is the track record of the management team and the software developers behind it?
Projects that cannot clearly explain their purpose, or that rely on a token simply to ride the hype, should be treated with caution. The same warning applies where both the technical and managerial teams have no credible history in technology or finance.
The article’s central message is that the Kenyan crypto space may keep expanding over the next couple of years, but the public should not confuse marketing with substance.
Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT. Email:, Twitter: @Jwalu
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