VIPortal, a Kenyan company providing forex trading services was seeking government guidelines towards the online currency transactions but met with difficulties and “misunderstanding” when Central Bank of Kenya defined the services as pyramid scheme, creating chaos among the VIPortal customers.
Online currency trading is made over the counter, meaning that the transactions are processed between traders around the globe.
"Increase in long term forex trading will be beneficial for the Kenya shilling. Therefore our business should be nurtured instead of being bullied around," said a trader at VIPortal Mwangi Gicheru.
The broker is currently charged with operating and providing forex services without a proper license.
"We do not operate in cash. We do not exchange actual money whereas a forex bureau deals in hard cash. We link ourselves to the international currency market through an electronic framework," said another VIPortal trader Collin Mundia.
Currently there isn’t been an official statement from the CBK.
The forex exchange market is a vast and most liquid financial market today with average daily transactions surpassing $4 trillion.
The market is open 24 hours, five days a week and allows anyone with internet connection to take part.
Forex trading in Kenya is still mainly performed through banks and online trading will be majorly welcomed.
Apart from being registered in Kenya, VIPortal is also incorporated in - St. Vincent & Grenadines and with a license number 21787/ IBC/ 2013. The company claims to employ over 500 workers directly and is registered with Kenya Revenue Authority, NSSF and NHIF.
"The type of interest your money earns is huge. If you can get 60 per cent a month for your investment, what is it compared to 10 per cent per annum that banks give?" stated Njuguna, the director of VIPortal.
Njuguna asks the clients to be patient and allow the broker time to resolve the issues. Currently all VIPortals accounts are frozen and therefore the payments to the clients are unable to be processed at this time.