Source: Article originally published on Techpoint Africa by Bolu Abiodun on July 25, 2023.
By theAfricoder News Desk | Published on July 31, 2023
A recent wave of closures has swept across Africa-focused crypto exchanges, the latest being Bundle Africa, adding to the escalating crisis in the region’s crypto space. These shutdowns, largely precipitated by the ‘crypto winter’ and regulatory challenges, have left the industry grappling with a steadily worsening investment climate compared to the bullish market of 2021.
The crypto market’s downturn was precipitated by the collapse of the $32 billion crypto exchange, FTX, in November 2022. Since then, the buzz and excitement that once surrounded digital tokens have drastically ebbed. Tales of billion-dollar earnings from meme coins have become sparse, and the optimism of crypto enthusiasts appears to be in decline.
The investment trend reflects the unfavorable conditions. In 2021, total funding was an impressive $37.06 billion, but it plunged to $21.26 billion in 2022, indicating a decrease of nearly $16 billion.
The crypto climate in Africa mirrors the global trend. Numerous Africa-focused crypto exchanges have ceased operations, succumbing to the grueling crypto winter and regulatory obstacles that plague crypto businesses worldwide.
Here, we highlight four notable Africa-focused crypto exchanges that have shuttered since FTX’s unexpected demise:
LocalBitcoins: After a decade of service, this popular peer-to-peer platform ceased operations in February 2023. In its closure announcement, LocalBitcoins cited the harsh crypto winter as an insurmountable challenge, leading to the halt of its Bitcoin trading service.
Paxful: The U.S.-based crypto exchange terminated its operations in April 2023, with CEO Ray Youseff attributing the closure to an unfavorable regulatory landscape. Interestingly, the platform resumed operations a month later and is now reportedly owned by a custodian serving as a director.
Bundle Africa: The most recent casualty, Bundle Africa, shut down its exchange operations in July 2023 to concentrate on its P2P product, Cashlink. While it did not attribute the shutdown to regulatory challenges or the crypto winter, it is reasonable to assume they may have influenced the decision.
LocalCryptos: Although LocalCryptos wound up in October 2022, a month before the FTX collapse, it is noteworthy on the list of fallen Africa-focused crypto exchanges. The platform launched in October 2017 and amassed 400,000 users before shutting down five years later, blaming the crypto winter and regulatory landscape.
The crypto landscape remains unpredictable, and no one can say for certain when the crypto winter will end. However, if the current trend persists, more crypto businesses risk falling victim to the harsh conditions unless a bullish resurgence materializes soon.