Africa Crowdfunding had probed Uprise.Africa after an news article expose linked the SA-based firm with offering a ‘fake’ pledge.
Uprise.Africa remains compliant with the Africa Crowdfunding Association’s (ACfA) Charter of Good Conduct (COGC), according to a statement by the ACfA.
ACfA began a probe against Uprise.Africa on May 13, days after a news article surfaced about a potential regulatory complicity. According to the allegation, the online marketing platform had botched its handling of the equity crowdfunding campaign run by Intergreatme (IGM).
The Africa Crowdfunding Association carried out a review of Uprise.Africa’s processes, seeking to find whether the company was in compliance with its COCG. Although the association noted that regulatory requirements under the Financial Advisory and Intermediary Services (FAIS) took precedence over the COCG, it still undertook the review as Uprise.Africa is a member of the ACfA.
ACfA did make recommendations for Uprise Africa regarding its risk management and communication. However, from the probe, and “in all other respects,” the Africa Crowdfunding Association said it was “satisfied that Uprise Africa remains compliant with our COGC.”
Uprise.Africa, a blockchain micro-lending that provides entrepreneurs and businesses with a platform test their business plans and sell equity, has released a statement following ACfA’s report. The company maintains that it offers a secure online platform, with its services offered in line with “required regulations and compliance parameters.”
The platform notes that it applies all due diligence to all investment processes and that contractual agreements are always in place to govern investor roles and responsibilities.
The startup reiterated that it understands the challenges and risks facing online crowdfunding on the continent. Uprise.Africa, therefore, has consistently updated its processes to ensure authentication and fraud monitoring.
In reference to the R25million that led to the probe, Uprise.Africa said the funds were “pledged to Intergreatme, through its own acquired potential investor.” The platform points out that this was one illustration of how malicious players can exploit risks within the Crowdfunding arena.
According to Uprise.Africa, its handling of the Intergreatme followed all the regulated steps that need to be adhered to during crowdfunding campaigns.
“[It] includes: (1) a pledge being received, (2) the pledgor and the funds must clear due diligence and compliance checks, which in this case was conducted by Uprise.Africa and (3) if cleared the pledgor signs a subscription agreement and only then becomes an investor, which did not take place in the case of the R25mill pledge.”
Meanwhile, Uprise.Africa has said it will refund all who participated in the Sun Exchange.