Netflix has expanded its ongoing crackdown on password sharing to South Africa after it admitted that the controversial move is having a positive effect on revenues and subscription numbers in markets where it’s already happened.
The US-based streaming entertainment giant has launched paid-for plans specifically for customers who want to share their login credentials with family or friends. The sharing of passwords has become an industry-wide problem, with MultiChoice Group’s DStv recently clamping down on the practice, a move the company has also claimed drove up paying subscriptions.
Netflix co-CEO Ted Sarandos
Netflix had already introduced its paid-for sharing options in about 100 countries, representing some 80% of its revenue base. South Africa was not among them, but the company has now included the country in its crackdown.
South African users have started receiving emails from Netflix regarding the sharing of their accounts
“Revenue in each region [where password sharing has been restricted] is now higher than pre-launch, with sign-ups already exceeding cancellations,” Netflix said a letter to shareholders alongside its financial report for the second quarter, published on Wednesday.
South African users have started receiving emails from Netflix regarding the sharing of their accounts. Netflix advises account holders to set up a “household” profile to help Netflix identify the profiles and devices it should associate with their account.
Household profiles can only be set from an internet-connected TV. If a user does not set up their household profile, Netflix will auto-create one based on “IP address, device IDs and account activity”. Any subscriber using an account whose household they are not a part of can have their profile transferred to a new account, which they can then pay for.
There are currently four pricing plans available in South Africa. The table below shows the various pricing options and the associated features.
It emerged earlier this week that Netflix is phasing out the cheapest ad-free plans in the US and UK, forcing new and returning subscribers either to move up to a more expensive ad-free plan or down to a cheaper ad-supported tier. Current subscriptions are not affected by the changes.
All plans in South Africa are ad-free, but recent changes to US and UK pricing structures suggest ad-supported tiers may be in the pipeline locally as well. Being cheaper than the equivalent ad-free offerings, they boost revenue by attracting new sign-ups while adding a second revenue stream for Netflix, which is “working hard to scale the business”.
A spokesman for Netflix in South Africa did not respond to questions about the new ad-supported tiers, and whether these will be introduced locally, too.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Durban, Africa’s biggest harbour, will be partly owned and operated by the Philippines’ International Container Terminal Services, a first for South Africa’s national ports company.
The company, known as ICTSI, has been selected as an equity partner to run and expand Durban Container Terminal Pier 2. Almost three quarters of the freight volume moved through the eastern port goes through the terminal and it accounts for 46% of South Africa’s total port traffic, according to state logistics company Transnet.
This agreement “is a key catalyst for repositioning the Port of Durban as a container hub port,” Transnet said in a statement on Monday.
Durban Port
South Africa is seeking to boost private participation in its ports, the poor performance of which is a drag on the economy. In a 2021 World Bank index of container port performance, Durban ranked 364th out of 370 and two other Transnet ports were in the bottom 10.
Transnet will own 50% plus one share in a new company that will manage the terminal for 25 years and will seek to boost its annual capacity to 2.8 million 20-foot equivalent units, or TEUs, from two million, it said. TEUs are used to measure trade volumes at container ports.
Ultimately Transnet wants to boost Durban’s total container capacity to 11.4 million TEUs from 3.3 million.
ICTSI, which operates terminals across six continents, was one of six bidders for the contract, Transnet said. It didn’t specify whether ICTSI will pay for its stake or whether it will have to fund the expansion. An announcement on the port of Ngqura will follow, Transnet said.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Genesis Energy is partnering with Imbumba Foundation to light up the trek to the peak of Mount Kilimanjaro with its generous donation of cutting-edge solar headlamps that will provide the climbers with the much-needed illumination as they summit the Roof of Africa in honour of the great Nelson Mandela.
Every year on the 18th of July, a remarkable expedition to Mount Kilimanjaro takes place—one that combines adventure, philanthropy, and the resolute spirit of Nelson Mandela. This extraordinary initiative, founded by the Imbumba Foundation – endorsed by the Nelson Mandela Foundation – encapsulates the essence of Mandela’s vision: unity, resilience, and the relentless pursuit of a better world.
The Trek4Mandela Programme is an initiative geared to raising vital funds and awareness for period poverty due to a shortage of sanitary towels for young girls while paying tribute to the revered Father of the South African nation, Tata Nelson Mandela. In support of this quest, GENESIS has donated boxes of solar headlamps to not only provide the source of light but promote sustainability as well.
“GENESIS is built upon three fundamental principles: Power, People and Progress. Our mission extends far beyond providing clean and reliable energy solutions. We believe that true progress is anchored on making a difference in the communities and countries where we operate. GENESIS takes great pride in embodying the spirit of Ubuntu by supporting the brave climbers participating in the 2023 Trek4Mandela expedition,” says Mrs. Melissa Sikwila, Genesis’ Group Executive Director: Project Development and Strategy.
Mount Kilimanjaro
“We are delighted to have partnered with GENESIS this year and highly appreciate their generous donation of solar headlamps for the 2023 July and August Trek4Mandela climbers. It is through such partnerships that we are able to impact communities, across different spectrums, with innovative solutions,” stated Richard Mabaso: CEO and Founder.
Commenting on the development Babalwa Bungane, Genesis Energy’s Head of Communications and Marketing said “As a trailblazer in the energy sector, we are dedicated to making a positive impact on the continent by supporting human development programs that drive socio-economic growth. Joining hands with Imbumba Foundation is one of the many ways GENESIS creates a meaningful impact in education, healthcare and local communities. We hope these headlamps will make a difference to the climbers when they make their journey to the peak of Mt Kilimanjaro for such a worthy cause.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
MySol Grid Zambia, a subsidiary of Engie Energy Access, has successfully secured a loan of $7.5 million to facilitate the off-grid solar electrification of 40,000 individuals in Zambia. The funding for this initiative is being provided by the Facility for Energy Inclusion (FEI), a mechanism established by the African Development Bank (AfDB) to support electrification projects in Africa.
This achievement marks a significant milestone for MySol Grid Zambia, which operates under the umbrella of the French company Engie Energy Access. The $7.5 million financing comprises senior debt obtained from the FEI and will be instrumental in advancing the company’s operations in Zambia. The funding supports the construction of 60 solar photovoltaic mini-grids across the country.
Gillian-Alexandre Huart, the CEO of Engie Energy Access, expressed his satisfaction with the attainment of long-term, non-recourse debt financing for mini-grid projects. This achievement highlights the viability of the business model and reinforces the credibility of renewable mini-grid initiatives within the context of rural electrification. The financial support from the FEI will contribute to the realization of the United Nations Sustainable Development Goals (SDGs).
The primary objective of the electrification efforts in Zambia is to provide access to reliable, sustainable, and modern energy at an affordable cost, in alignment with MDG7. MySol finances, installs, and operates solar panel systems integrated into containers, which also house batteries for electricity storage. These containerized plants establish mini-electricity grids capable of supplying power to local communities. With the assistance of the FEI funding, MySol aims to establish an installed capacity of 5 MW.
The project is expected to bring electricity to at least 40,000 people, as well as small businesses and shops situated in rural areas. This initiative aligns with the 11th European Development Fund’s Improving Access to Electricity and Renewable Energy Programme (IAEREP). MySol received a €6 million grant from the European Union (EU) under the IAEREP program a few years ago. By expanding the adoption of off-grid energy solutions in Zambia, this program will create economic and social opportunities for families and small businesses that are unable to connect to the national grid, according to Engie Energy Access.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The CEO of Twitter, Elon Musk has said that Twitter’s cash flow remains negative because of a nearly 50% drop in advertising revenue and a heavy debt load, falling short of his expectation in March that Twitter could reach cash flow positive by June.
“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a tweet replying to suggestions on recapitalisation.
Musk said on Sunday in another tweet that Twitter did not see the increase in advertising revenue that had been expected in June, adding: “July is a bit more promising.” Twitter Spaces also hasn’t generated revenue yet and is “all cost”, Musk said.
CEO of Tesla, Elon Musk
Need to reach positive cash flow before we have the luxury of anything else
This is the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October alone are not enough to get Twitter to cash flow positive, and suggests Twitter’s ad revenue may have not recovered as fast as Musk suggested in an interview in April with the BBC that most advertisers had returned to the site.
After laying off thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to US$1.5-billion from a projected $4.5-billion in 2023. Twitter also faces annual interest payments of about $1.5-billion as a result of the debt it took on in the $44-billion deal that took the company private.
It is unclear what time frame Musk was referring to by the 50% drop in ad revenue. He has said Twitter was on track to post $3-billion in revenue in 2023, down from $5.1-billion in 2021.
Twitter has been criticised over lax content moderation, followed by an exodus of many advertisers who did not want their ads appearing next to inappropriate content.
Musk’s hiring of Linda Yaccarino, former ad chief at Comcast’s NBCUniversal as CEO, signalled that ad sales are a priority for Twitter even as it works to increase subscription revenue.
Yaccarino started working at Twitter in early June and has told investors that the company plans to focus on video, creator and commerce partnerships and is in early talks with political and entertainment figures, payments services, and news and media publishers.
On Thursday, Twitter said that select content creators will be eligible to get a part of the ad revenue the company earns in an attempt to draw more content creators to the site.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The President of the Republic and Standard-bearer of the Ruling Coalition for Democratic Change (CDC), Dr. George Manneh Weah, says Liberia has come too far and better with infrastructural and human capital development in the last five years of his presidency and that the most plausible and sensible thing to do is to embrace political continuity than let allow the resurgence of the failed political order.
Addressing hundreds of thousands of CDCians and supporters on Monday, July 17, 2023 at the party’s headquarters during program commemorating his achievements in five years of his presidency, President Weah defended his government’s enviable progress expressed tangibly, among many other things, in improved road infrastructure, construction of more schools and hospitals as well as youth development.
The CDC flagbearer said in spite of the gigantic progress made, some remnants of the old guard have launched a campaign of lies and vilification, seeking to deceive the Liberian people, both at home and abroad, “about the unprecedented changes we are bringing about”.
Dr. George Manneh Weah
President Weah was, however, quick to point out that the people of Liberia are wise, tired of the relics of the past, and tired of old parked cars.
He said further: “As we approach the upcoming race, my competitors boast of experience. Yet, I stand before you today as the most experienced candidate, having served as president for the past five years. We have utilized our time in office to work tirelessly for the Liberian people. We have not squandered the opportunities that were entrusted to us.”
President Weah noted that Liberia is not a test tube for failed experiments, emphasizing that the lives and futures of the people are at stake, that they deserve better, and deserve development.
“The improvements in our economy and infrastructure are evident for all to see. We are on an irreversible path of progress, a path that touches every sector of society,” he asserted, adding that Liberia and its people have an inherent right to prosperity and development, just like any other nation in the world.
With the abundant human and natural resources the country possesses that are comparable to those of our neighbors and beyond, and as Africa’s oldest Independent Republic, the President said it is disheartening that it cannot boast of corresponding development.
He said, “It is even more disheartening that those who have contributed to this failure for over four decades are now raising their hands, seeking another chance to continue this sad narrative.”
The CDC Standard Bearer implored Liberians not to be swayed by what he calls “the empty promises of the failed elite of this country.”
Dr Weah said Liberians should not be tempted to drink the same old wine from the same old bottles, but instead recognize, embrace, and celebrate the generational change in national leadership that has taken place under his guidance.
“And when the time comes, let us exercise our precious franchise wisely to maintain this momentum.”
Tracking tangible developments
In keeping with the real essence for Monday’s congregation of CDCians and supporters which is to commemorate the achievements of his six years, President Weah recounted the strides and copious initiatives of his government that put the country on par with other countries.
“When my team and I assumed office in 2018, we were well aware of the enormous challenges that lay before us. Our economy was in dire need of revitalization, our road infrastructure was in disrepair, and our schools, hospitals, and market buildings were neglected. It was our duty to address these pressing issues and ensure a better future for all Liberians,” the President asserted.
He said that in pursuit of progress during these six years, his government has achieved significant milestones, constructed hundreds of kilometers of roads, and transformed connectivity across the country.
“Our efforts have extended to the education sector, built and rehabilitated numerous school buildings, in order to provide access to quality education for the youth,” he said.
“We have also focused on improving healthcare services by establishing new hospitals and investing in the well-being of our people.”
He further asserted: “To secure a prosperous future for our young generation, We understand the importance of removing barriers that hinder their potential. That is why we introduced and implemented programs such as free tuition and fee payments for WASSCE and WAEC.”
President Weah announced that the government’s commitment does not stop there as they aim to expand all national programs that reach every young person in Liberia, regardless of their social backgrounds.
The Liberian Chief Executive said his administration harbors the firm belief that the youth of today are the leaders Liberia needs right now, not just in the future, stressing that “This is our time, and together, we will shape the destiny of our beloved nation.”
He recalled witnessing the struggles of parents trying to provide for their children, especially in terms of affording their education.
The CDC First Partisan maintained that such experience ignited the fire in him to create change.
“It was the catalyst that led to the formation of the Congress for Democratic Change two decades ago. We were a group of Liberians tired of the failures of the old order, particularly its impact on the youth of our nation. We came together to make a stand, to make a difference,” he said.
“We united because we could no longer tolerate the same old politicians who talked about problems without offering solutions. We could not stand idly by while children were denied an education and our infrastructure crumbled.”
He said that triggered the need to usher in a new era—an era of young leaders who are practical, dedicated, and ready to confront national challenges head-on because they had realized the country’s position among the nations of the world was slipping away.
The Liberian Leader proudly announced that they are well on the way to fulfilling the vision of the Pro-poor Agenda.
President Weah informed the jubilant partisans who defied the drenched weather that he will soon embark on a journey to every town and village, reminding every Liberian of the need to stand with the unprecedented level of development taking place in the country.
He reminded all that “Liberia is a nation with immense potential, and together, we will unleash that potential,” pledging to build a Liberia that thrives, and a Liberia where every young person has the opportunity to succeed.
The President vowed to rededicate himself to the singular purpose of working tirelessly to bring about the prosperous future all Liberians deserve.
Extending olive branch
The CDC standard-bearer used the occasion to express regret that some of those who started the journey but are no longer with the party, saying that their dream of a better Liberia lives on through the leadership.
He similarly extended an open invitation to all former members of the CDC who have left the Party for any reason whatsoever to come back home to the family they once belonged.
“Whether it was because of dissatisfaction, disappointment, disrespect, disgruntlement, disenchantment, or any other “dis”, let all bygones be bygones, and come home to join hands with your brothers and sisters in this great commission for victory.”
“Whatever you think we did to you that hurt your feelings or your pride, PLEASE FORGIVE US!, and Whatever you might have done to us that may have hurt our feelings or our pride, WE FORGIVE YOU.”
The task ahead of is formidable, he said, but not insurmountable, and stressed that it calls for all hands on deck while looking forward to welcoming them back with open arms and with warm hearts.
The President expressed gratitude and humility for the mammoth presence of partisans, supporters, and well-wishers and described the moment as a testament to the collective vision they share for a brighter and more prosperous Liberia.
He also expressed heartfelt appreciation for the trust and mandate you bestowed upon him six years ago, classifying it as a responsibility he has carried with the utmost seriousness and dedication. He used the occasion to announce Mr. Len Eugene Nagbe, Commissioner General of the Liberia Martine Authority, as Campaign Manager of the CDC.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Norfund, the Norwegian Development Finance Institution, and Unilever Nigeria have made substantial investments in Wecyclers Nigeria Limited, a recycling company headquartered in Lagos. Norfund has committed Euro 2 million (equivalent to approximately USD 2,247,790.00) as a convertible loan, while Unilever Nigeria has provided an additional USD 2 million. These investments have raised a total of approximately USD 4,247,790.00 for Wecyclers.
The primary purpose of these investments is to support Wecyclers’ expansion and development. The funds will be utilized to establish a new recycling plant in Ogun State, Nigeria. This plant will specialize in recycling PET bottles, transforming them into new bottles both locally and in Europe. With a projected annual capacity of 12,000 tons, the plant aims to significantly contribute to reducing plastic waste and promoting sustainable waste management practices.
Wwcyclers founder Olawale Adebiyi
Why The Investors Invested
The investments made by Norfund and Unilever Nigeria are driven by several compelling reasons. The pressing global issue of plastic pollution necessitates urgent and sustainable solutions. The world’s oceans currently contain an estimated 171 trillion pieces of plastic, with projections indicating a potential tripling of this number by 2040. The investments in Wecyclers aim to showcase an effective model for recycling and waste management, encouraging the development of the recycling industry as a crucial step in tackling plastic pollution.
Furthermore, the investors recognize the potential for job creation and economic growth associated with sustainable waste management practices. Wecyclers’ expansion and the establishment of the new recycling plant in Ogun State are expected to generate a significant number of job opportunities. This not only contributes to poverty reduction but also helps build resilient and sustainable communities.
Additionally, Wecyclers’ successful model of waste collection directly from households, kiosks, and franchises, combined with their close collaboration with a European plastic producer, ensures that the recycling process and output quality meet international standards. The investors view this as a promising partnership that fosters trust, credibility, and the promotion of sustainable waste management practices.
A Look at Wecyclers
Wecyclers was founded in Nigeria in 2012 and has become a leading recycling company in the country. The company was founded by Olawale Adebiyi and his team. While Wecyclers is headquartered in Lagos, it operates in various Nigerian states, with its primary markets focused on urban areas.
The startup’s unique approach involves the direct collection of recyclable materials from households, as well as through strategically located kiosks and franchises. By incentivizing individuals to participate in recycling efforts, Wecyclers has successfully created a model that encourages widespread engagement and increases the collection of plastic waste.
In addition to the investments from Norfund and Unilever Nigeria, Wecyclers has garnered support from Serioplast, a prominent Italian plastic packaging manufacturer. Serioplast has been a minority shareholder in Wecyclers since 2018, providing expertise and resources to support the company’s growth.
Wecyclers received the additional USD 2 million in funding from Unilever Nigeria and Bridges Outcomes Partnership. This investment, facilitated through an innovative “Development Impact Bond,” aims to expand Wecyclers’ collection network and enhance its impact on plastic waste management. Over the next five years, Wecyclers anticipates collecting up to 30,000 tons of recyclable plastic waste and creating approximately 700 jobs.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The Executive Committee of The Arab-Africa Trade Bridges (AATB) Program, a multi-donor, Inter-regional program, launched a US$1.5 billion Food Security Program to address the issues of food insecurity in the Arab and African regions amidst the ongoing global food security crisis. The crisis is a critical challenge facing the world today and continues to be a top priority on the international development agenda.
The hybrid launch event, which took place at the headquarters of the African Export-Import Bank (Afreximbank) in Cairo on 6th July, was attended by the various partners of the AATB program as well as top-tier regional and local media. Members of the Executive Committee addressed the gathering and highlighted the relevance of the Food Security Program to their member countries.
By emphasizing its special interest in the food sector, AATB aims to leverage its expertise, resources, and partnerships to implement targeted engagements that address the specific challenges faced by member countries. The Food Security Program is developed around the four pillars of the AATB Program, namely Trade, Investment, Insurance, and Infrastructure. In addition, the program incorporates a fifth element, which is capacity development and technical assistance, serving as a cross-cutting theme and an enabling factor. As part of the program, funded and unfunded financial transactions related to food security will be provided, alongside capacity development and technical assistance services.
The primary aim of the program in the short term is to address the immediate food security requirements of member countries, with a specific focus on ensuring the resources for a consistent and reliable supply of essential food commodities. This objective also recognizes the urgency of meeting the immediate needs of populations facing food insecurity.
Additionally, by attracting investments, upgrading infrastructure, optimizing value chains, and fostering cooperation, the program aims at building resilient and sustainable food systems that ensure the availability, accessibility, and affordability of nutritious food for all. These measures will contribute to long-term food security and support the overall socio-economic development of the region.
The Food Security Program is a key focus of AATB, reflecting its commitment to addressing the evolving priorities of member countries in crucial sectors such as health and food security for sustainable development. By prioritizing the food sector, AATB recognizes its importance for human well-being, economic growth, environmental sustainability, and interconnected development. Through this Program and associated initiatives, AATB aims to contribute to achieving the SDGs and promoting inclusive economic development among member countries.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
William Mzimba, head of Vodacom Business in South Africa, is stepping down from the company after five-year tenure. His last day on the job will be 30 September. In a statement, Vodacom confirmed Mzimba’s impending exit, saying he is retiring from the role. A successor will be named in due course, the company said.
“I would like to offer my gratitude to William for his invaluable contribution in growing Vodacom Business, including overseeing Vodacom’s SmartGov initiative, which saw the deployment of smart metering solutions that improved revenue assurance for the municipalities, citizen engagement and smart asset management,” said Vodacom South Africa CEO Sitho Mdlalose in a statement.
William Mzimba, head of Vodacom Business in South Africa
“William was instrumental in repositioning Vodacom’s cloud, hosting and security business, where he spearheaded a strategic partnership with Amazon Web Services resulting in the creation of Vodacom Amazon Business Group. This further fast-tracked Vodacom’s drive into a fully-fledged multi-cloud provider, which delivers cloud-first solutions.”
During his tenure, Mzimba headed up Vodacom Business enterprise units in Africa where he led a team tasked with driving digital transformation of businesses and governments across several industries and markets, the company said. He also helped expand Vodacom’s internet-of-things offerings.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
There are indications that cryptocurrencies have survived a run of favourable regulatory and investment moves which may shift momentum in markets that had been stuck in a rut for months. Bitcoin traded at its highest price since June 2022 overnight, touching $31 818 on the Bitstamp exchange. It is up more than 90% for the year so far and nearly 30% in a month.
Second-biggest token ether had its best session since March and Ripple, which a US judge ruled could be legally sold on public crypto exchanges, soared 73%.
The regulatory environment is changing. And by what we have seen in the last 24 hours, it could be for the better
“The regulatory environment is changing,” said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital. “And by what we have seen in the last 24 hours, it could be for the better.”
Crypto Currency
The Ripple ruling came together with fraud charges against the former boss of bankrupt crypto lender Celsius Network, which are contested, and on the heels of moves into the market by finance firms BlackRock and Fidelity.
Investors say it is driving a mood shift.
“Ripple stakeholders were waiting for some regulatory clarity. Yesterday the court seems to have provided just that,” said Justin d’Anethan, head of business development in Asia at Keyrock, a digital assets market maker in Hong Kong.
The language remains somewhat unclear, he said, but finding that XRP tokens sold on public crypto exchanges were not securities under law “probably serves as a precedent”.
It unleashed a rally in smaller cryptocurrencies called altcoins, with tokens such as solana, matic and stellar up between 15% and 50% and shares in exchange Coinbase up 24% to a year high.
“If centralised crypto projects aren’t securities, then that may make it more likely for the Commodity Futures Trading Commission to be primary regulator for the industry, which is something most people in crypto would prefer,” said Greg Moritz, chief operating officer of crypto hedge fund Alt Tab Capital.
He said further cases would probably shed more light on how courts will treat private crypto offerings.
Traders said liquidity was low on the altcoin moves, but steadily improving in bitcoin and ether. Turnover for Coinbase stock was the highest in 14 months on Thursday, giving weight to a move that has more than doubled the stock price in a month.
Crypto assets are now trading near or above levels plunged when the collapse of the FTX exchange last November plunged the sector in the depths of what has been called the “crypto winter”.
FTX imploded when it was unable to honour a rush of withdrawals and its failure, exposing customers to losses, added momentum to global regulatory efforts at reining in the sector, especially to protect small investors lured by fast returns.
China has all but banned crypto. US investigators raking over FTX have accused founder Sam Bankman-Fried of multibillion-dollar fraud, to which he has pleaded not guilty.
Celsius founder Alex Mashinsky also pleaded not guilty to his charges on Thursday and, to be sure, plenty of other legal challenges remain pending and market setbacks are expected.
Coinbase and bigger rival Binance face lawsuits, which they are contesting, from the SEC and in Binance’s case from other regulators as well. A top SEC official said last month the industry has “an ethos built around non-complicance”.
The entrance of traditional finance businesses into crypto, bringing in large sums, has evoked memories of the rally that lifted bitcoin 300% in 2020. For the first time in a while, there’s been consistently positive news coming though and that means you’ve got momentum.
The world’s biggest asset manager, BlackRock, filed to launch a bitcoin exchange traded fund last month and earlier in July exchange operator Cboe refreshed its filing for a similar fund to be run by asset manager Fidelity.
“We’d gone through this long period of just consistently negative news to make the space look pretty grimy,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne. “For the first time in a while, there’s been consistently positive news coming though and that means you’ve got momentum.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
