BitPesa is a Kenyan startup operating as a Bitcoin remittance service. Together with Lipisha, an automated mobile payment service, they have taken Kenya’s leading mobile operator to court. Allegedly, Safaricom has intimidated the Lipisha and made it stop services abruptly without giving notice to its customers. That is according to Disrupt Africa.
Lipisha relies on a number of platforms to automate its mobile payment services, one of which is M-Pesa by Safaricom. Up to until November 12, it was business as usual for the little startup company, when the market goliath Safaricom came in and forced it to suspend its services to probably its biggest client BitPesa.
Previously Safaricom has explicitly asked BitPesa to stop transacting in Bitcoins, as reported by Techcabal. The two small companies joined up forces to seek legal address to Safaricom bullish behavior in the market. Lipisha made claims that Safaricom had demanded it produce a license from the Central Bank of Kenya (CBK) assuming that the company traded in Bitcoin. It would be important to note, Kenya has not banned trade in digital currencies like Bitcoins.
Kiragu Kimani, the lawyer for BitPesa and Lipisha said the following to the Daily Nation, “The suspension of BitPesa’s access to M-Pesa services, and the demand that Lipisha stops transacting with BitPesa is unlawful and infringes on the firms’ right to acquire and own property, fair administration as well as their economic interests.
It is CBK, which told BitPesa that Bitcoins are not regulated in Kenya, but Safaricom insists that it produces a license to that effect.”
The CEO and co-founder of BitPesa, Elizabeth Rossiello while addressing CoinDesk made the following statement: “I do not wish to comment much on a matter in court. BitPesa has been wronged, which is why we have referred the matter to court…We remain confident that even a small company like BitPesa will gain a fair trial and look forward to the court’s decision.”
The court will make its ruling on the matter come December 14. In the meantime, Safaricom continues to bar Lipisha from using its mobile money services M-Pesa. In effect, BitPesa cannot transfer Bitcoins to Local currency to its users via Lipisha services as of now. Geek Savanna will keep you posted on how this developing story.