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Revealed: How A Worried Safaricom Used Backdoor To Shutdown Bitcoin Which Was Set To Neutralize Mpesa Dominance In Kenya



Bob Collymore ,Safaricom CEO

Bob Collymore ,Safaricom CEO

Bitcoin, Mpesa and the case of BitPesa

Kenya Insights has embarked on an in-depth investigation into the underworld operations of Kenya’s biggest telecom, Safaricom, in the first episode of the eight series of investigative pieces, we look into Bitpesa. BitPesa, a promising company, founded in 2013 was first to market using a groundbreaking global payments transfer technology, the Bitcoin Blockchain. Bitcoin blockchain technology, is completely open source, threatens Safaricom’s cross-border money transfer partnerships. A Citi Bank report came out last month citing this technology as highly disruptive in African cross-border payments. Again, Safaricom took to its tried and tested dirty tricks to move fast and shut down the service before it gained traction.

BitPesa’s business model allows customers (businesses and individuals) from both abroad and in Kenya, to send and receive money internationally instantly from your mobile phone. The company chose to use Bitcoin blockchain. Customers based overseas and in Kenya would send bitcoin to Bitpesa and Bitpesa would pay out Mpesa. Or Customers would send Mpesa to Bitpesa, and they received Bitcoin.

A brilliant idea! Joe Mucheru, a renowned successful tech entrepreneur and current ICT Cabinet Secretary was the first investors in the company board. The man has seen it all. From his vast experience building Wananchi, a million dollar Internet Service Provider, and later as a top boss at Google. He immediately saw the value in leveraging an emerging technology to capture the $1.2 billion remittance market now dominated by foreign companies. He put in 40 million KES, 50% of BitPesa’s 70,000,000 seed capital.

All was going well.

Lipisha Consortium Limited, a payment gateway service firm, was contracted by BitPesa to automate the in and outs of Mpesa. For this purpose, it was necessary to sign up for Safaricom’s PayBill API service. The lack of proper APIs in Kenya highlighted earlier, means running a payment gateway is a tightly controlled affair for a privileged few. For example, few companies get all the contracts and are wholly dependent on Safaricom for revenue. This is what Safaricom to have a tight grasp of who, how and when technology companies can access the platform. Lipisha is one of these few privileged companies.

ICT Principal Secretary Sammy Itemere, CS Joe Mucheru with Safaricom chief executive Bob Collymore

ICT Principal Secretary Sammy Itemere, CS Joe Mucheru with Safaricom chief executive Bob Collymore

Over one and half years, the company began getting outstanding traction. BitPesa went on to raise another $1.2 million to expand its operations in Tanzania, Uganda, Ghana and Nigeria. It immediately got attention from numerous publications on. A Citi Bank report hailed BitPesa for using blockchain technology, for solving Kenya’s poor cross-border payments infrastructure problem. According to sources, by December 2015, the company was moving as much as $400,000 in volumes monthly.

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Safaricom could not help but notice BitPesa’s high volumes moving in and out. From its internal servers, Safaricom could see BitPesa’s transactions on customers’ Mpesa accounts. Volumes were going up, and the number of customers was growing.

Safaricom had good reason to worry. The company’s partnerships with foreign money transfer operators earn them a tonne of fees and entrenches Mpesa the brand. Xoom, PayPal, Skrill, Western Union and Worldremit currently have arranged partnerships. So, it was only a matter of time before Safaricom swooped in once more as they have done in the past.

Using its muscle, Safaricom demanded an urgent meeting with SpotCash, a partner company that relies 100% on business from Mpesa. SpotCash had signed up BitPesa Ltd. on its PayBill services via Lipisha Consortium Ltd. The company called insubordinate employees at Spot Cash’s service desk and immediately threatened to cut off ongoing services to the enterprise if the matter was not handled promptly. Sources reveal the tone was harsh and threatening.

Spot cash could do little but oblige. The company immediately shut off the service, triggering what would wind up in High court as a lawsuit for improper termination of services. Safaricom’s sway and monopoly had reared its ugly head again.

Is Bitcoin a Threat to Safaricom’s Mpesa Cash Cow?

For Safaricom, shutting down BitPesa was an attack on a potential threat, and had little to do with any existing law. Asking to see a license from CBK, of which none existed was conniving. BitPesa had not broken any Kenyan law and had taken all prudential measures to align itself with the law.

As a young potentially disruptive start-up company grows up, it begins to get noticed by established companies. This is always a great milestone in any young company’s life. Should the established companies partner with the start-up? Should they copy it? Should they close their eyes and wait to see if the start-up withers? Or, should they try and squash it?

Safaricom’s argument in court, against Bitpesa, was the same argument made by Kenyan Banks to stop Mpesa when it was launched in 2006. Back then, Kenyan Banks argued Safaricom was operating as a bank without appropriate licenses. They called for Mpesa to be banned from operating.

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“Banks were publicly grumbling for some time that the playing field was not level for them and that Safaricom was taking on banking business without the appropriate license.”

At the time, Mpesa was unregulated. There was also no regulatory precedence to look up to. The Central Bank of Kenya gave a nod to proceed while monitoring.

Today, the same Banks that argued against it, now depend on it for their operations.

Fast forward to 2016 and the tables have turned. Safaricom is like the Kenyan Banks of yesteryears and now wants to shut down another budding technology, Bitcoin Blockchain.

“Safaricom claimed that Bitpesa had failed to obtain authorization for bitcoin transfers from Kenya’s central bank. Bitcoins are not regulated in Kenya, but Safaricom insists that it produces a licence to that effect.”

Bitcoin drastically lowers the cost of sending money anywhere in the world for free. There are no hidden or varying charges on Bitcoin like Mpesa. There is no license fee required to use the Bitcoin Blockchain like with Mpesa. Any company, big or small can tap into its open technology. Because it is highly disruptive, it potentially eats up what would be Mpesa’s market. Vodafone executives and Safaricom recognised this and came down hard on BitPesa.

In fact, this is not the first time Safaricom has clamped down on a Bitcoin Blockchain company.

Kipochi, another Bitcoin Blockchain company, set up in Kenya in February of 2013. Their plan was to enable interoperable payments between vendors using blockchain. Headed by CEO Pelle Braendgaard, the company set out on developing a prototype, Kipochi Pay.

Kipochi first integrated with Mpesa for testing out the product among a limited set of user, in-house staff. The prototype worked well enough to show the Central Bank of Kenya and local Telecommunication companies what was possible with the technology. It solved the interoperability problem that plagued Kenyan Banks and Mobile money operators. It did not matter that you were on Airtel, Orange, Mpesa or a bank. You could send money for the same price to anyone.

Just like Bitpesa, the company had to partner with a local Mpesa payment gateway. Kopo Kopo was one of the few payments gateways that had permission from Safaricom. Again, like BitPesa, Kipochi got massive coverage from the global press.

Elizabeth Rossiello, BitPesa CEO

Elizabeth Rossiello, BitPesa CEO

The events that followed were all too familiar. Within a week or two, Kipochi’s connection with M-Pesa through  Kopo Kopo was shut down abruptly without notice. It took Pelle more than a week to find out that Safaricom had forced Kopo Kopo to shut them down. Sources later revealed that the order to choke them off came from Vodafone in London. Vodafone Executives were up in arms over the attention the company was getting.

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Pelle Braendgaard explained what happened in a blog titled ‘What happened at Kipochi’.

Speaking to Pelle and Kipochi, they revealed they had informal meetings with the Central Bank of Kenya, who called them in to find out who they were, what they were up to and what the hell Bitcoin was. Officials at the CBK seemed knowledgeable and gave them an informal green light to continue as long as they partnered with existing financial institutions or Telcos.

Despite Central Bank regulators being wide open to new money transfer and online payments technology, Safaricom would hear none of it. They stifled the project by essentially cutting off the channel access to customers. Kipochi’s USSD Bitcoin wallet required access to servers in racks at local telcos. The approval process took months, as Safaricom dragged out the affair.

In a well-documented documentary film titled ‘Mpesa has no Competition’ on Bitcoin and Mpesa’s clash in Kenya, Pelle cited Safaricom pressured regulators.

Kipochi was eventually forced to close shop after operating in Kenya for more than a year. In his last interview with a local newspaper detailing Safaricom and Mpesa’s dominance, Pelle said
“digital currencies can help drive financial inclusion and inter-link mobile money platforms for easy access anywhere around the world. Bitcoin can solve interoperability between mobile money providers both within Kenya and throughout the world.”

As for Petition 502 of 2015, BitPesa and Lipisha Consortium Ltd. lost the case. On 14th December At Milimani Law Courts, Justice Joseph Onguto ruled in favour of Safaricom, saying

“The Commercial Agreement between Lipisha Consortium and Safaricom reveals that Safaricom could suspend, not terminate the services it offers to the plaintiff, even without notice and for any valid reason.”

In the weeks that followed, the Central Bank of Kenya issued a public notice on Bitcoins in Kenya. The CBK clarified bitcoin and virtual currencies in Kenya were not illegal, and Kenyans were free to choose to buy, sell or hold Bitcoin. But the damage had been done. It was too late.

Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on or via Telegram


Exposed: Nairobi Women Now Using ARVs To Add Weight And Mass



While majority of women in Kenya’s urban areas are struggling with obesity and weight loss, a breed of women have emerged that are doing everything to gain weight.

City women are now using antiretroviral (ARVs) to enhance their body mass and weight in well-organized groups of 10 from a popular social media app.

These women are first brought together through posts who later form or added to Facebook groups. Majority are always resistant to enter into this perilous and prohibited act at first.

Sources to the writer indicate that the Facebook groups are used to lure and convince the naive and unsuspecting souls who are desperate to gain weight.

Many of these women are willing to do anything to get to their anticipated weights. Majority also don’t know where to get the ARVs.

The source further says that the willing group members are later taken to a city pharmacist who sells them ARV drugs at Ksh 5,000. The now-unnamed Pharmacist is allegedly HIV positive. That’s how he’s able to access the drugs more often.

The prescription runs in a year.  With some women saying that they would only stop taking drugs when they hit the weight of their choice.

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Dr Patrick Gichohi a HIV-AIDS specialists states that injection of ARVs in a healthy body changes the distribution body fats. Majority of Nairobi women confuse it with body and weight gains.

“Various antiretroviral drugs, for instance Efavirenz may possibly cause psychiatric complications.  Whereas protease inhibitors, anti-HIV replicator drug, may well elevate levels of cholesterol,” Dr. Gichohi revealed.

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The HIV-AIDS specialist also said that ARV will have calamitous effects on their bodies sooner or later.


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Opposition Leader From Western Involved In Sh400M Gold Scam



Blocks of fine Gold Photo|CNN

Sheikh Mohammed bin Rashid Al Maktoum the leader of Emirate of Dubai has filled complain to Kenya that an opposition senator has conned the Royal family Ksh 400 million of gold.

The opposition senator is among a gang of six cartels that are under the keen eye of DCI’s investigations of their involvement in the Gold scam. The gold fraud has implied strong complaints from the Vice President and Prime Minister of the United Arab Emirates.

The DCI is trailing a scheme that saw the royal family scammed multi-millions allegedly to secure a release of 5 tons of gold that had been purportedly seized at JKIA.

The Directorate of Criminal Investigations says the alleged seizure was, supposedly, to be the first batch of a 23 tons gold shipment that was to be illegally brought in the country from DRC.

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The trail has unraveled that the opposition senator flew to Dubai severally to persuade Royal Family that he has associates who would release alleged seized gold.

The said opposition Senator, a politician and a businessman who runs a private jet leasing company at Wilson Airport have since denied all the allegations from the Royal family.

Preliminary investigations show that the scheme started September 25, last year when the Senator and his group approached a nephew of Sheikh Maktoum, Mr Ali Zandi. Ali is a representative of Dubai based gold trading company, Zlivia.

The cartel told Mr. Ali that they can deliver 4.6tons of gold from DRC. They had secured services of a Russian gold dealer who wanted down payments and transportation charges to Dubai.

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The senator and his cronies contacted Mr. Ali on September 27 alleging that the gold consignment had been incarcerated by customs officials at JKIA.

Investigations indicate that Massoud Zandi a representative of Zlivia Gold Trading Company called the Senator for help and on 15th December last year the opposition senator flew to Dubai on the invitation of Mr. Zandi.

The senator demanded cash to ease the release of the alleged confiscated consignment. Mr. Zandi was of the contrary opinion and flew in the country on 24th December last year with hopes of meeting a senior Kenyan government official.

Mr Zandi could not manage a sit down with the government official instead the senator and his cartels took Zandi to JKIA and showed him sealed boxes allegedly holding Gold.

On January 21, this year, Zandi was secretly moved at night to meet a Cabinet secretary imposter at a Karen Hotel. The senior government imposter met Mr. Zandi in a car in the presence of the Senator.

They, the Senator and the CS imposter guaranteed Zandi that his Gold will be released in a week time after he flies out back to Dubai. Zandi says he has neither received his gold nor heard from the six cartels months later.

Sheikh Maktoum has forwarded a written complain to Kenya through the Interior Cabinet Secretary Fred Matiang’i. The Royal family leader has requested immediate actions to those involved in masterminding a gold scam against the Family.

Sheikh decided to contact the government directly after the cartels lied to him that the delay to release the consignment was caused the DusitD2 attack.

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“Nevertheless, now we need your immediate and strong action to release the totality of Zlivia Gold shipment to UEA as soon as possible and accordingly to the instructions by our General Manager Mr Zandi who is there in Kenya to organize the shipment.” Quote from the Sheikh’s letter to interior CS dated 20th January.

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Since the Shiekh wanted the matter to be solved as soon as possible, a Russian national Yulian Stankov and Mohammed Rashi both wanted international scammers were on Friday arraigned before the Milimani Law Courts in Nairobi. The two are said to be in connection of the Ksh 400 Million scam.

Investigators told the court that Stankov did not have any identification documents. He was arrested after saying that he’s shipping 5tons of gold to Dubai.
DCI Investigators demanded the permission to access cell phones of the accused persons to aid in the investigations of their involvement in the gold scam and other related Cybercrimes.

Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on or via Telegram
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How Nairobi Girls Are Lured Into Prostitution On Instagram



The society has been filled with ‘get rich quick’ mentality. Many of young generation are doing whatever they are capable of doing to ‘prosper’.

Our desk has received information of couple of Instagram accounts that are luring girls into prostitution.  Nairobi girls are being lured into sex for cash business in what is termed as private parties and businesses in foreign countries.

The Instagram Direct message post says an agency in Nairobi has orders from sponsors who offer cash for sex.

                     Instagram Direct Message screenshot     Photo|Christine_rence

They even claim to have a quotation of  Ksh 50 thousands for a single sex session. They convince unsuspecting girls that they conduct vital tests before joining the agency.

Instagram has been flooded by photo maniacs’ celebrities and fake Socialites who are actively promoting prostitution.

Socialites have taken over the Instagram app.  Currently majority of gram users are Posting and sharing travel pic and the Porsche lifestyles.

Instagram is now a certified prostitution platform.  The platform has verified sex for cash accounts that have misled the entire generation.

Young girls are tricked to joining agencies that later connect them to sex addicts in Dubai, Qatar, UAE and many other destinations.

Fake lifestyles posts and big currency quotation are key things these slavery agencies invest in to lure young naive girls.  With some posting fake ownership of businesses on some of the world’s greatest destinations.

Many cases of sexual assault and abuse have been reported by Kenyans working in diaspora. Some who Kenyan embassy had no idea they were in the respective foreign countries.

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So many young naive girls’ minds have been besmirched by fake travel pics and lifestyles on Instagram. Majority have been enticed to travel to foreign countries like Dubai, Qatar and other Middle East countries only to get sexual abused and assault.

Instagram has turned a blind eye on the increased sex for cash and sexual slavery promoting agencies on its community.

They also have verified socialites with fake lifestyles. The same people who are alluring girls into prostitution in foreign countries.

This makes them accomplices in the now most famous activity on their platform.

Here’s A Facebook post of Oge Nwabueze elucidating her awful sexual experience in Foreign terrestrial


Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news, story angles, human interest stories, drop us an email on or via Telegram
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