Safaricom CEO Collymore averted a huge cryptocurrency catastrophe

Had he been in the United Kingdom, the late Bob Collymore would most likely have been knighted for his efforts towards advancement in the telecoms industry. For the corporate social responsibility he spearheaded as Safaricom CEO, he would be known as “Sir Bob”.

I still cannot fathom who will fill the big shoes Collymore left behind following his death last week, better yet find the right words that befit the work he did at Safaricom, but it’s all in the fore for Kenyans to experience — mobile phone banking, M-Soko, M-Pesa Foundation, M-Shwari and Fuliza, among others.

But it cannot be lost on a legal mind that, while Collymore was at the helm of the gigantic telco, he helped to avert a financial cryptocurrency catastrophe that stared at the public use of M-Pesa platform for bitcoin transactions for Bitpesa and Lipisha Consortium Ltd.

Safaricom, wisely, suspended its services to the company in question, thereby occasioning a suit.

Cryptocurrency such as bitcoin are, according to the Central Bank of Kenya (CBK), not legal tender. They, therefore, remain unregulated, hence posing a grave risk to the public thanks to the exposure to hackers and internet frauds. Countries like Japan, South Korea, Brazil and even the United States have experienced financial losses to crypto-hackers and fraudsters. Kenya dodged that bullet.

In the Safaricom case — Lipisha Consortium Limited & another v Safaricom Limited (2015), also known as the Bitpesa Case — the court ruled on the legality of trading cryptocurrency.

Safaricom had suspended its M-Pesa services to Lipisha Consortium and Bitpesa because the latter was engaged in a money remittance business using bitcoin without CBK approval. The court held that Safaricom was within its rights to have acted as it did.

Further, the court admitted that it could not compel Safaricom to trade with Lipisha and Bitpesa as the telco could be found to be in breach of anti-money laundering regulations by allowing bitcoin trading and remittances through its M-Pesa platform. This was due to the anonymity associated with bitcoin trading, in contravention of know-your-client (KYC) requirements in remittances and money transfer regulations.

Safaricom has an estimated 30 million users in Kenya and 13.4 million others outside the country. Had it allowed cryptocurrency trade on its platform, it would have been a Ponzi scheme at your doorstep, exposing 43 million people to financial misery!

Safaricom dreaded charting virgin, anonymous and unregulated crypto-waters. “Sir” Bob had a periscope arced towards public good. This is not to mention the latest stroke of a genius by Safaricom — the “reverse-call” to help a poor ‘Wanjiku’ with no airtime to enjoy her right to communication.

Indeed, it’s a no-brainer that “Sir” Bob never worked alone, and these were joint efforts and teamwork initiatives in the company — but spearheaded by him. For quite some time though, “Sir” Bob was like the alter ego of Safaricom. Like a colossus, may his legacy guide his successors.