ZIMBOCASH account holders have been unable to transact using the digital currency for over a week and a half now. Earlier today ZIMBOCASH sent an email out to the subscribers explaining the cause of downtime.
It seems scammers who were creating multiple accounts were the main reason why ZIMBOCASH decided to hault payments. The email reads sent to account holders reads;
We, unfortunately, have had to put the payments gateway in maintenance mode – you won’t be able to make transactions for the time being. We have had some challenges with respect to identity validation of our users – some users were creating multiple accounts.
We had originally been relying on cellphone numbers as a proxy for identity – but a few subscribers were creating scam accounts. Unfortunately, it always is just a few individuals who spoil it for the others.
We highlight that you will not lose your ZASH. Your ZASH balance is safe.
How will ZIMBOCASH plug the hole?
In the same email, ZIMBOCASH addressed how they plan to fix this issue. They explained that after going looking for solutions they are left with 2 solutions. In their own words those are;
- We can tweak the cellphone as a proxy for identity model using certain APIs into the existing cellphone/ mobile money infrastructure or;
- We can develop/acquire our own KYC process which would include an uploaded ID and a “liveness” test.
The first option is easier for us to do if we can get those API’s, so we are investigating our alternatives (and we are open to discussions with any third party who can provide us with that access). The second option is difficult and will take a great deal of additional development.
When will the issue be resolved?
ZIMBOCASH disclosed that the process may take anything from a few days to a few weeks which will definitely be a big set back for account holders and ZIMBOCASH itself.
Does this make sense?
Given the above context, I think ZIMBOCASH’s move to stop processing transactions altogether is acceptable. Whilst they will lose out on account holders – the digital currency cannot risk becoming synonymous with scams and scammers.
Cryptocurrency are already easy to knock for a number of reasons so for ZIMBOCASH to lose the trust of account holders because of scams would be a big blow and on they might not be able to recover from in the long term.