BD Insider: What Binance wants from Nigeria

Jesutofunmi Adedoyin -

In this letter, we explore:

  • Binance lists conditions for registering in Nigeria
  • JPMorgan CEO to visit Africa in growth push
  • South African retail giant sees growth in crypto payments

We also curated updates on startup funding in Africa, weekend reads, and several opportunities.

The big three! 

Binance lists conditions for registering in Nigeria

After  Nigeria’s Securities and Exchange Commission (SEC) opened up licence applications for crypto exchanges, it isn’t surprising that Binance has held back, given its strained relationship with Nigeria. The company has now laid out two conditions that must be met before it will consider registering under the SEC’s special framework for onboarding Virtual Assets Service Providers (VASPs).

What are the conditions? The first condition is the release of Binance executive Tigran Gambaryan from Nigerian custody. Gambaryan was detained by Nigerian authorities in connection with allegations of tax evasion, money laundering, and foreign exchange contravention. Binance denies these allegations.

The second condition is the settlement of legal and regulatory bottlenecks with the Nigerian government. The federal government has commenced prosecution of Binance on the grounds of tax evasion, money laundering, and foreign exchange contravention.

Context: The SEC has granted approval-in-principle to other crypto exchanges, such as Quidax and Busha, to operate in Nigeria under the Accelerated Regulatory Incubation Programme (ARIP).

The SEC requires all Virtual Assets Service Providers (VASPs), including crypto firms, to establish an office in Nigeria under ARIP. Binance has resisted this requirement, citing the ongoing legal dispute with the Nigerian government and the lack of a supporting legal framework.

The standoff between Binance and the Nigerian government has implications for the regulation of cryptocurrency platforms in Nigeria. The SEC's efforts to bring crypto platforms under its regulatory purview are ongoing, and the outcome of the Binance case could set a precedent for other VASPs operating in the country.

JPMorgan CEO to visit Africa in growth push

Africa is set to receive an August visitor in October. The CEO of JPMorgan, one of the top five international private banks,  is set to embark on a trip to Africa in mid-October. This visit marks a renewed focus by the largest U.S. lender to expand its operations on the continent.

Jamie Dimon is expected to visit Kenya, Nigeria, South Africa, and Ivory Coast during his trip. JPMorgan already has a presence in South Africa and Nigeria, offering asset and wealth management, as well as commercial and investment banking services.

Why Africa? Africa has become a strategic growth market for JPMorgan. The bank aims to capitalise on the continent's growing economy and increasing demand for financial services. JPMorgan is seeking to expand its offerings in areas such as debt, corporate transactions, and wealth management.

Context: While JPMorgan has faced regulatory hurdles in some African countries in the past, especially in Ghana and Kenya, recent developments suggest that the bank is making progress in its expansion plans. Kenyan President William Ruto has expressed support for JPMorgan's entry into the market, and the bank is reportedly close to opening a new office in Nairobi.

JPMorgan's focus on Africa aligns with the broader trend of major global banks seeking to increase their presence on the continent. The growing number of international companies operating in Africa presents opportunities for banks to provide a range of financial services.

South African retail giant sees growth in crypto payments

South Africans are increasingly embracing cryptocurrency. Pick n Pay, a major South African retailer, has experienced a significant increase in cryptocurrency payments since it began accepting them in February 2023. 

Per a report by crypto investment platform Luno, monthly crypto transactions at Pick n Pay have surged from R25,000 to over R1 million ($57,000). Bitcoin remains the most popular cryptocurrency among Pick n Pay customers and on Luno's platform.

While the growth in crypto adoption is notable, it's still a relatively small portion of Pick n Pay's overall sales. The retailer's Supermarkets division reported R7.6 billion ($435.4 million) in sales for the 2023 financial year.

Luno Pay, a service launched in September 2023, has processed over R3 million in transactions with an average basket size of R370 ($21).  This indicates a growing trend of using cryptocurrencies for everyday purchases.

Context: South Africa’s progressive regulatory approach, as evidenced by the recent approval of 63 new crypto asset service providers, further supports the growth of the crypto industry.

Primarily cryptocurrencies have been used as an investment tool. The increasing acceptance of cryptocurrencies as a payment method in South Africa is seen as a positive development which hints at a shift away from viewing crypto solely as an investment tool.

💰 State of Funding in Africa

Here’s a roundup of African startups that secured funding last week:

  • Regfyl, a Nigerian regulatory tech startup, has secured $1.1 million in pre-seed funding. The funding came from Techstars, RallyCap Ventures, DCG Expeditions, Africa Fintech Collective, Musha Ventures, and several strategic angel investors.
  • SETTLE, an Egypt-based B2B payment platform, has raised $2 million in a pre-seed funding round led by Shorooq Partners with participation from other investors, including El Sewedy Capital Holding, Acasia Ventures, and Plus VC.
  • LabLabee, an Algerian ed-tech platform, has raised $3.4 million in its seed funding round. Reach Capital led the round, which also included Classera, Brighteye Ventures, e& Capital, and other angel investors.
  • Moroccan travel SaaS startup Userguest has closed a $2.4 million seed funding round. Al Mada Ventures led the round, which featured CDG Invest, Saviu Ventures, UM6P Ventures, Kalys VC, Plug & Play, and business angels Philippe Limes and Thane Kuhlman.

🍿 Weekend binge

💼 Opportunities

We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.

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GoLemon — Customer Success Expert, Remote