Kenyan High Court Hears BitPesa Case Against Safaricom

Monday, November 30, 2015

A lawsuit filed by bitcoin payments startup BitPesa and its partner against mobile money giant Safaricom was heard in the Kenyan High Court on Tuesday.

The startup says Safaricom “intimidated” its gateway partner, Lipisha, forcing it to suspend its services without prior notice, according to Kenyan newspaperthe Daily Nation. The stoppage came into effect on 12th November.

As a result, BitPesa and Lipisha are facing significant challenges to maintaining their business. A lawyer for the two firms told the Daily Nation that BitPesa is “at risk of collapse” because it’s now unable to conduct its business.

The two firms sued Safaricom for infringing on their rights to acquire and own property, fair administration and economic interests.

BitPesa uses Lipisha as a payment gateway to enable transfers and conversions of bitcoin into other currencies, including Kenyan shillings on Safaricom’s mobile money platform M-Pesa.

Safaricom argument at hearing

During the hearing on Tuesday, Safaricom argued that the suspension of service to Lipisha was justified because of anti-money laundering rules.

The mobile money operator claimed that Bitpesa had failed to obtain authorisation for bitcoin transfers from Kenya’s central bank. As a result, Bitpesa’s transactions through Lipisha and its account at Safaricom contravened AML rules.

Source: CoinDesk (link opens in a new window)

digital payments, telecommunications