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South African firm closes first equity deal using Bitcoin

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Bitcoin - [https://www.bitcoin.com/wp-content/uploads/2017/03/what-is-bitcoin-story.jpg] Bitcoin - [https://www.bitcoin.com/wp-content/uploads/2017/03/what-is-bitcoin-story.jpg]

A Cape Town-based technology firm has has conducted an equity deal entirely in Bitcoin, at a time when financial experts have been debating the legitimacy and long-term value of cryptocurrencies.

Nona Creative, a digital consultancy and product development firm, recently bought out a significant shareholder in what it said may be the first ever Bitcoin equity transaction in the country.

Nona Creative CEO, Mike Scott, said: “We firmly believe in Bitcoin and wanted to show just how effortless it is to conduct normal business transactions using cryptocurrency.”

The flagship cryptocurrency continued its march higher on Monday, solidifying above $11,000 and bringing its climb this year to more than 1,000%.

With cryptocurrency still an unregulated currency, Nona Creative consulted with law firm, SchoemanLaw, for compliance and legalities of the transaction.

Managing director for the legal firm, Nicolene Schoeman-Louw, said: “It is no longer a question of whether such currencies, including Bitcoin, should be regulated or not, but rather who will be doing the regulating.”

Until this regulatory framework has been determined, Schoeman-Louw stressed that those interested in conducting business transactions using such currencies should first seek professional advice on the taxable responsibilities, implications, and obligations.

Nona Creative also consulted Afzal Khan, the Tax Partner at RAFT – an association of African National Accountants, Auditors and other specialists – for insights into the tax considerations associated with the transaction.

“Current tax principles may be incorrectly applied where tax advisors do not adequately understand the underlying factual transaction flows for crypto. The principles for taxation of ecommerce transactions and financial instruments are clear. However, specific rules may be developed in future to clarify the duality of crypto financial instruments,” he said.

While many have described the cryptocurrency trend as a ‘bubble’, Scott said that Nona Creative has chosen to focus on the underlying blockchain technology which is unlimited in terms of real business uses.

“We understand that cryptocurrency is still in its early stages and, in some cases, is still a solution looking for a problem. However, we believe that this is where things are going and we are ready to lead in this space,” he said.


 

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