Tax tracking and crypto funds: Bitcoin fork Africa

Tax tracking and crypto funds: Bitcoin fork Africa

Last week, the major piece of crypto news in Africa was the injunction to Nigerian banks to close the accounts of cryptos users. Meanwhile in South Africa, the tax authorities were hunting down those who would hide certain revenues in crypto. Fortunately, the week ended with some positive news: Jack Dorsey and Jay-Z donated 500 BTC for the development of Bitcoin in Africa.

The Central Bank of Nigeria on a crusade against cryptos

The Central Bank of Nigeria on a crusade against cryptos

As we announced earlier this week, the Central Bank of Nigeria (CBN) has ordered banks in the country to identify and close the bank accounts of individuals and companies involved in transactions related to cryptography.

The consequences were immediate. Within hours of the announcement, Binance suspended deposits in Naira. Trading volumes quickly shifted from centralized exchanges to P2P platforms such as Paxful, Localbitcoins and Binance P2P.

At the same time, a wave of protests broke out. The hashtag #WeWantOurCryptoBack was picked up more than 26,000 times in less than 24 hours on twitter. Several reactions from the public mentioned a political conflict between the SEC and the CBN. Indeed, on September 11, 2020, the Securities and Exchanges Commission (SEC) had declared that cryptomoney is a security until proven otherwise. At the time the SEC even planned to work on a clear regulatory framework for cryptos.

In response to these claims that have gone viral on social networks, the SEC issued a statement last Thursday denying the existence of a political conflict between the two institutions. The SEC also announced that it would put on hold any proposed regulation on cryptography, saying that the decision comes in response to the new CBN directive ordering financial institutions to close accounts for transactions related to cryptography.

However, the SEC said it was working closely with the CBN to « create a regulatory structure that fosters economic development while promoting a secure, innovative and transparent capital market.

In the wake of this, on the same 11 February, the Nigerian Senate summoned the CBN governor to clarify, within two weeks, the advantages and disadvantages of using cryptoskills. Case to follow at the level of the Nigerian Senate.

South African tax authorities track down users of cryptoskills

The South African Revenue Service (SARS) has asked taxpayers to declare their cryptographic assets. Several individuals have received correspondence from SARS requesting disclosure of transactions related to cryptography. This request, which resembles a tax audit, has landed in the mailboxes of people who have never used cryptography.

Tax Consulting South Africa, a firm specialising in tax consultancy, has been looking into the matter. It believes « it is possible that the South African Revenue Authority is setting up a trap for guilty taxpayers who have not disclosed their profits and/or losses from trading in cryptoskills ».

This means that users of the cryptostates who have failed to declare their income in the past and those who have passed on false information run the risk of being sentenced to « pay a fine and in serious cases serve up to two years imprisonment ».

All those who have received the correspondence are called upon to provide the Tax Authorities with information on their crypto activities. This includes bank statements, the reason for investing in cryptos and a letter, from the exchanges, confirming the investment with the transaction history attached.

On 06 April 2018, the SARS announced that it will apply the current rules on revenues to cryptosystems. This measure shows that the South African tax authorities are keen to ensure that those who use cryptos pay their taxes.

Jack Dorsey and Jay-z finance Bitcoin’s development in Africa

Jack Dorsey and Jay-z finance Bitcoin's development in Africa

Last Friday, Jack Dorsey (CEO of Twitter) announced in a tweet his new initiative with rapper Jay-Z. No announcement of a music-related contract, but a donation of 500 BTC (which represents about $24 million) for the development of Bitcoin in Africa and India.

A fund called « ₿trust » was set up from time to time with the mission « to make Bitcoin the currency of the internet ». The mission of the fund is to financially support initiatives with the potential to stimulate the adoption of Bitcoin in Africa and India.

Jack says that neither he nor Jay-Z will be involved in running the fund. The two donors just need three board members to launch the initiative. Anyone can apply to be on the board of « ₿trust ». Just fill out this form and send your Proof of Work. Be careful, you are not asked to buy super calculators to validate a block but to prove by your past work that you deserve a place on the board of the fund.

Africa thus ends its crypto week on a positive note, despite the various hunts launched by some administrations against crypto aficionados. We stay on standby to share with you this week’s crypto-African adventure, which we hope will be more positive.

Hi, this is Gloire. In 2014 I heard about Bitcoin. There was no interest until the end of the 2017 bubble. Since then, I’ve been studying the subject with passion while sharing my little discoveries with the community.

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Tax tracking and crypto funds: Bitcoin fork Africa
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