Crypto winter: in wake of FTX’s collapse, Africa’s crypto community calls for urgent regulation

The recent collapse of FTX exchange platform has sent shockwaves around the world, taking with it billions of investors’ money, including in Africa where crypto investors are now taking stock of their own losses.

While some users in the United States and the Bahamas were able to withdraw their funds before the full crisis hit, African traders may never access their money. Crypto enthusiasts not least from around Africa who traded different coins on FTX-linked platforms have been unable to withdraw their investments while crypto startups are facing their own losses.

“It is time Africa enacts laws that hold foreign companies accountable for their actions,” says Lucky Uwakwe, CEO of Lagos-based tech firm SaBi Groups. “If the African Union delays to push for these laws, then regional blocs such as the Economic Community of West African States (ECOWAS), East African Community (EAC), and Southern African Development Community (SADC) should lead the way in protecting Africans against future economic shocks from foreign players.”

Many African central banks — Ghana, Kenya, Namibia, Nigeria, South Africa, Tanzania, Uganda, and Zambia — have been warning against the use and trade of crypto, but their citizens kept trusting the platforms in the hope of high returns. Only Ethiopia seems to be seriously regulating the space. African businesses that had started accepting crypto payments have now halted the processes, as the industry keeps getting murky. Some startups were also trapped inside the crypto mix. And while also crypto lender BlockFi is preparing for potential bankruptcy in the wake of the FTX collapse, crypto adoption in Africa and overall enthusiasm for crypto is fast fading and the continent is bracing for a prolonged global crypto winter.