How VALR became Africa's largest crypto exchange

0:00I'm Ashton Addison from the Crypto Coin Show and today on Blockchain interviews I'm joined with Farzam Esani, co-founder and CEO of Valar, Africa's largest crypto exchange backed by huge hitters like Pantera Capital and Coinbase Ventures. Farzam, welcome to the show and thanks for taking the time.

Thanks for having me. Great to be here, Ashton.

It's always good to know more about the

0:21African continent. They've they've jumped hurdles over the old infrastructure of the US and like they're taking over, especially in crypto and decentralized networks. I feel like they're they're connected and you guys have millions of users to show for it and you're just continuing to grow at a fast pace. I'd love to know, to start us off, sort of a high level on

0:44what you think about the African crypto market and how is Valar uniquely positioned as the top crypto exchange in Africa?

Sure. So, I think the African crypto market, the story and the narrative isn't too dissimilar from anywhere else. And the way we like to see it at Valar is really the fact that we're building a global financial system that recognizes the

1:08oneness of humanity, right? And that's really that this system that's obviously internet native, you just need an internet connection and literally doesn't matter where you are, you can access the beauty about the storage of value, the transfer of value, etc. right? So, so while that narrative is the same globally, it has big implications for Africa because of all the frictions that

1:32exist in Africa, particularly in the financial services space. So, you know, with about 54 countries across the continent with different types of regimes, with different types of currencies, different types of regulations, etc. it's really difficult to move money and to transact on a pan-African scale without tremendous amount of cost and friction.

1:56So, what crypto does is really just elevates the whole infrastructure layer to something that trans- transgresses or trans- What's the word I'm looking for? Goes beyond transcends. There we go. Transcends the kind of national border level and it just takes things to where they should be, which is a seamless movement of value and transactions. And I like to look at that

2:22like the internet, you know, before we used to go through post offices and there was a tremendous amount of friction and it was slow. And we elevated that to the internet level and so nobody worries about the fact that, you know, we're we're you know, going over and at a supranational level with our communication networks. In fact, it's a beautiful thing for the world. And soon

2:43that will be the trend more widely adopted across the whole world for crypto assets is my belief.

Mhm.

That's on the crypto for Africa piece. On Valour, we have been at it for about 8 and 1/2 years now. The founding team was actually doing some work at the largest bank in Africa in the crypto space for two hour for two hours a little bit more than two hours two years

3:07before that. And then we branched off on our own and have been building just really what we want or what we believe is the infrastructure of the future, the financial markets infrastructure of the future in a box effectively. And so we provide, you know, custody, we provide spot markets, spot margin markets, perpetual futures. We've just announced our integration

3:32with the Hyperliquid to bring over 200 different types of markets across you know, equities and indices and commodity commodities and FX to our users. So we really I think our focus is on service to humanity. We're really here progress in ever advancing civilization. We're doing our very best to serve our customers and our users.

3:59And I think that intent is tremendously important. You know, I think there are many people still in the crypto space and beyond whose intentions aren't necessary to serve, but to extract. And we really want to be able to serve, to use our lives to do something noble. And we believe that's what we're doing to try to advance our financial system and kind of build the next

4:24chapter of the world's financial history or at least contribute to it. Is why we what inspires us and what we try to bring to our users.

I love that, Farzam. And that big picture of just unification and that's also why I got into blockchain and crypto over 10 years ago trying to see that the benefits to the everyday people and be able to have them rise up

4:49and take control and ownership of their financial lives, right? Which is such a big part of every people everyday people's lives. And trying to manage it or unify Africa with crypto, I think it's a great initiative. You mentioned there 54 countries. A lot of people in the US watching are looking, "Well, this is just one country, right?" And the legislation is

5:13back and forth over years. I can't imagine trying to unify 54 countries. May- maybe you can talk about, you know, is there a crypto capital of Africa and or high-growth pockets or how does that work trying to manage

Yeah.

everybody in the continent?

Yeah, so I think, you know, when you look at Africa, you know, to your point about being

5:39one entity or this, you know, conglomerate of countries, you know, honestly, when you look at the map, it looks like it's a political shattering of the continent into so many different countries, right? Obviously myself and many people on the continent really view the African continent as just a huge powerhouse of the future, right? But we will need to transcend those

6:03those differences, those political barriers, those frictions that I talked about earlier. Regarding the crypto capital of Africa, I would say right now that South Africa's got the largest crypto activity from the perspective of centralized exchanges like Valor because the regulatory environment has been such that, you know, Valor is licensed, we've been licensed for a few

6:26years, we've been building for 8 and 1/2 years. Throughout that entire history, we've been engaging with the regulators, they understand what we're doing. We've been trying to assist them with the regulatory frameworks or at least helping them with understanding our world a bit better because this is all very very new for regulators around the world.

6:43And so by virtue of the regulatory environment that we have in South Africa, we definitely have the largest markets, the largest like trading markets if you want to think about centralized trading markets, order books, deepest order books in Africa that are in South Africa. Having said that, there are big pockets of activity

7:06across the entire continent. So obviously Nigeria is a very big country, has a lot of activity, but that activity is more P2P based and it's really fragmented away from the centralized exchanges. Obviously there were there were some challenges with some other large crypto global exchanges there where there were some political matters that were

7:31challenging, I think, for the industry and for the country. And so things like that have I think stunted the at least the regulatory crypto space in Nigeria. In Kenya, although it is coming back up, right? So, there's a lot that's actually happening now and progressing in Nigeria, but it is still, I would say, a P2P market for the most part.

7:56Kenya, there's the regulatory regime right now is being unfolded. We [clears throat] actually have the vast bill that was passed last year. And so, right now the regulations are are coming to fruition over there. So, Valar is also very much involved there. We have our country manager that's pushing for things forward in Kenya with the regulators and also

8:18just getting ready for centralized exchanges like Valar to come and provide our services to the public. But again, that's been a very much of a P2P market. And I would say for the rest of Africa as well, you have some exchanges, but as I said, the vast majority is P2P on the rest of the continent outside of South Africa. And then,

8:43I would say if you look at those three corners, it's the bulk of what's happening on the continent, but with stablecoins now, we're also seeing an explosion of activity across all borders, across the continent, across countries, for all types of people. So, it's it's a really very exciting time, and I think with regulations that are maturing across the

9:05world and particularly in Africa, we're going to see many more companies that are emerging, much more activity that's emerging. The regulators will have a little bit more more accommodative stances. You know, we've had a very difficult time as Valar just to get bank accounts in many African countries. And one of the main reasons is also we are very open with what we

9:25do, so we tell people very clearly we're crypto com- we're crypto company. People buy and sell Bitcoin, stablecoins, etc. Can we operate in your country and also can we have a bank account? And when you're very open like that, then it's very clear what you can and cannot do. And so we prefer to just operate very openly. Some of our competitors may not do that.

9:47They have taken a little bit of a different stance. But we will go where we're welcome, and we won't go where it's not legal to be operating.

Yeah. Yeah, I think transparency up front is a good route to starting businesses in these jurisdictions. You know, right now, as we speak, we're going through the 2026 World Cup. And it seems like that a lot of the

10:09African teams have been doing very well. And from what I'm hearing across social media, a lot of people are now interested in checking out these countries, going and visiting Africa, maybe investing in Africa. And I'm curious on your insights into the international investment ecosystem into Africa. And does cryptocurrency play a role in that?

Yes. So, first of all, World Cup in

10:36Africa, this is not the best time because we've seen a few teams exit the tournament, which is a sore spot for my heart cuz I'm really rooting for an African country to win. But yeah, they have done well. Oh, they've Yeah. Let's see. Hopefully they do better, and there's still a couple in the running, so let's see. As far as investment in Africa, we've

10:55seen a big uptick over the past, say, 5 years, I would say. So, Valar, we raised our Series B about 4 years ago in 2022, we raised $50 million at that time. It was the largest crypto raise on the continent. I don't know if it still is or not, actually. But the 99% of that funding was from investors that are didn't come from the continent. So, from the US and other

11:21places. So, I think right now, with the world becoming much smaller, with crypto assets just being seamlessly available to, you know, the human population globally. I think we are seeing more and more investment. I think we still there still are a lot of things to solve to kind of create a much bigger adjustable market in Africa from

11:49the perspective of just the frictions that I talked about, but that challenge is a huge opportunity. Right? So, I think that the players that are trying to tackle that like Valor have a huge opportunity and a commercial opportunity to go after because as we serve people, I think the commercials will come with that as well. So, I think many are recognizing

12:09that. We also know that globally there's there's a ton of demographic issues that we have across the world. Africa doesn't have those demographic issues. And so, if you look forward a little bit into the future, you see a very bright economic future for Africa that isn't similar to other places based on demographics. So, so that's also a very exciting thing about about

12:32the continent. And then and I think you know, there are a lot of frictions with regulation historically on the continent, but crypto is pushing and piercing and asking questions about our current regulatory infrastructures and policies and frameworks. And so, we're seeing a lot of movement. In South Africa, they've just got had

12:57something called the draft capital flow management framework that has come out. There've been a tremendous amount of comments that have been given to the regulators there. And so, we're really I think the this entire industry is pushing the world to ask some fundamental questions about our the way money flows and value flows. And I think it's going to be

13:19Once you get through this haze, then it's going to be a really beautiful picture ahead.

Definitely. I'm looking forward to that. And in inside of Africa with all these different countries, they use a lot of different currencies as well. From what I know, it seems like some of the countries are even using American currency, European currency, African

13:39currency. How does the crypto exchange deal with that? And yeah, let's start with that.

Yeah, sure. So, where we can, we have indirect integrations to with banks. So, you know, we are we also have a European entities, Singaporean entities, a whole bunch of different entities. So, and we use these different entities according to, you know, where we're

14:02licensed and who we can serve, etc. right? So, we have integrations with ZAR, South African rand. We have also bank accounts with dollars, euros, GBP. We also have plugged into mobile networks across the entire continent. So, the largest mobile network on Afrik, or the largest integration across mobile networks. People have the ability to fund their

14:27accounts from pretty much all African nations, plus or minus, into into their Valr account. So, we have that integration, which is really integrating into the historical, traditional financial system. And then obviously, we have the integration into all the blockchains, into we have we host a whole bunch of those ourselves, integrations into places like

14:47Hyperliquid. And so, what we really do is bridge this gap of the traditional financial system and this new world of crypto assets. And we offer a whole bunch of services on top of that. So, it's not just trading, like I mentioned earlier, you can also do collateralized lending, you can do borrowing, you can borrow against your assets on Valr and

15:06withdraw your assets. There's yield products that you have. And so, really maybe it's helpful when I look at finance, I really look at all of finance to do with value of some sort. And that value, whether it's dollars, pork bellies, oil, corn, crypto, it doesn't really make a difference, gold, you really look at five things that finance is doing. Number one is storing

15:34that value. Number two is transferring the value. Number three is exchanging the value. Number four is providing the value in loans. And number five is protecting the value in derivatives or insurance and things of that nature. And there's of course of course there's a you know advice element across all of those. But really when we look at these five pillars of finance, we're building

15:54across all of that in a new on new rails in a new paradigm. Right? And then obviously building and historically here integrating kind of backwards integration into the traditional financial system to give access to people as they migrate into this new financial ecosystem and infrastructure. So that's kind of the way we see what we're doing.

That's amazing. And the announcement of

16:17the hyper liquid integration, what does that bring beyond you know the basic DeFi and trading that you had before?

Yeah, so historically our DeFi was really integration into Ave for yield. We also had our own perpetual markets. We still do and we will continue to have those. But you know, one of the things that's important for me as well is to just look

16:44in the mirror and be very honest with yourself and with your customers about what's been going very well and what hasn't been going so very so well. So our perpetual market futures while they were great and we were the first in Africa to provide them and we built our entire infrastructure that is still there that is still there. As I mentioned our liquidation engines, risk

17:05engines, etc. The liquidity was very difficult to get. Right? So it's only a few million dollars that's trading on our own perpetual futures books. Right? Whereas our spot markets are much much bigger than that. And if you look globally, you're generally your perpetual futures markets are much larger than your spot markets. So, and it's also very expensive for

17:26centralized exchanges to provide liquidity for their customers. And a lot of people don't realize that, but there's a lot of investment going into the fact that when the customer wants to come and buy or sell an asset or a contract or a perpetual future, that they have someone to trade against. And that often times involves, you know, external market makers and there are

17:45fees associated with that. And those fees rack up very quickly. And so, it really needs to make sure you need to make sure that you have enough volume to cover the fees for those markets. So, what we decided is that we said, if you look at the decentralized space, there's a tremendous amount of liquidity that's in that space. And these markets are growing like wildfire.

18:07And while many people ask the question about, well, is it CeFi going to win or is DeFi going to win? M- My view and our view is that's the wrong question. Right? The wrong The right question is, okay, how do we take the capabilities from wherever they are to progress our financial system? And so, we looked at this and we said, well, what we have is a distribution network

18:29to all of our millions of customers or we've got about 2,000 corporate institutional customers as well. We do compliance as a centralized exchange would do. We have a support desk. We hold the hands of our customers. They can write in. We call them just to make sure that they, you know, they can reset their password on Dollar as an example. We hold and we

18:49manage all of their private keys. And so, we looked at that and then we looked at DeFi and we said, there's a tremendous amount of liquidity, but obviously with DeFi, there's no help desk that you can call. You can go and reset your password if you lose your key. Right? It's It's really kind of It's really getting to the core of finance when

19:13you're looking at a protocol level and what's going on at the protocol level. So, we're bridging this protocol level infrastructure with deep liquidity with our regulated environment and customer base where we can provide as I said, support and guidance to them. And we think that the combination of that with CDfy is a tremendously powerful combination that will bring the benefits

19:36of deeply liquid decentralized markets with all of that all of that what we do, the user experience, the trusted platform that we bring to our customers without our customers ever having to leave Valor. So, that's really the thesis of what we're doing and we think we're going to be seeing this more and more. We're the first to do it with hyperliquid globally as a as a

19:56centralized exchange. But we don't think we're going to be the only ones. We think many people will follow suit as well.

Yeah. No, now I understand and that makes sense. There it's sort of like there's all these different blockchains and the liquidity is fragmented across them and it's just a better experience if, you know, the key point is that hyperliquid is a

20:18decentralized network. So, it's not like we're all just funneling to one centralized entity and allowing them to control everything. If it's a decentralized network, if it's more liquidity and more volume for the customers, they're going to have a better experience and better fees, especially if you're trading a lot, you're you're going to keep a lot more of your funds, which is

20:39sort of the point of crypto.

Absolutely. Absolutely. Also, I mean, talking about keys, obviously, Valor manages all of that for our customers. One of the things that I love about crypto is that people have the option. And so, what we've always we've kind of we see ourselves as a little bit of an oasis in this ocean of the new kind of chapter of finance, which is going to

21:02be based, I think, in many ways on a decentralized infrastructure that we have with our crypto assets and different types of exchanges etc. But the beauty of that is that people have their choice. And there are, you know, one of the things that I always like to tell people is that there's always risk, but you need to understand what the risk is, right? So with a

21:23centralized exchange, you're entrusting us as the custodians of your capital. Now, are there risks with that? Of course there are risks with that, right? There's there's risk with every single centralized exchange, right? But if you don't do that and then you hold your own keys and then, you know, deal directly with a with an exchange or with DeFi as an example, then you need

21:46to ensure that your keys don't get compromised. Of course, we have a dedicated group of or team of cybersecurity experts and professionals that are actually doing this full-time, you know, every day all day. But we're also protecting a much larger pool of assets. And so that choice for the end customer is what I love about our industry, which is there's no right or wrong way

22:10In absolute terms. It just depends on who you are, what your skills are, what you're comfortable with, what risk that you're willing to take, and then make your choice, you know? And so what I say to many of our customers is that if you can safeguard your own crypto assets, then withdraw your own crypto assets and hold them on a, you know, a hard

22:27wallet or you know, cold storage of your own etc. But the beauty is choice in this new world.

Mhm. Well said. I read that Valour has partnered with some of the other companies in Africa and they're flying helicopters around with crypto for everyone on the helicopter for everyone to see. Maybe you could explain that and why you feel that's important and that now

22:56is the right time to be doing that.

Sure, so a couple of points there. Number one, again, this concept of unity is really important to me personally and to Valar. And so, the crypto for everyone is really we're not here to There's there's a lot of friction where people say it's us against the banks or it's us against you or it's C5 against

23:23D5. We're not interested in those divisive conversations.

Mhm.

What we are interested in is providing a service for everybody

Mhm.

and for humanity to progress, as I keep saying, right? So, that's the crypto for everyone, which is really we're doing this not for the Degen's or, you know, the young ones or, you know, the more the most kind of tech-savvy

23:44people. We're really building an ecosystem that we believe will be here to serve everybody. That's the first thing.

Mhm.

The helicopters is just, you know, we had an opportunity to do so. It's been received very well and it's very exciting to get, you know, pinged whenever they do fly. We get our entire team gets pinged by people

24:04that we know say, "Oh, I just saw the Valar helicopter flying around my area, etc." so, that's just in combination with a whole bunch of the other marketing initiatives that we have, but it has been something that's been very popular.

That's fun. What are you most excited about moving forward? This hyper liquid integration sounds like a huge step, but are you

24:23are you pretty optimistic in the rest of this year and into 2027 for crypto in Africa?

I think my excitement spans a little bit further into the future. I think

That's good.

Yeah, I yeah, I think that I'm really excited about kind of the step changes, the paradigm shifts, right? And so, we still are a world that for the most part is using

24:51Swift as our as our rails to move value around the world, right? Crypto assets and crypto rails are by far superior The from a speed perspective, from a cost perspective, from a transparency perspective. So, what gets me really excited is the transition to a world where crypto assets isn't a cute thing. It's I think we're beyond the cute thing in the

25:15anymore in any case. But, it's not as peripheral as it still is right now to the main financial system, right? So, that transition really excites me. But, the reason I temper my excitement somewhat is that the world is going through some very difficult times. We're going through socio-political difficult difficult difficult times. We're going through economic difficult times for

25:39many parts of our population. There are bifurcations in our economies, inequalities, et cetera. Not to say that there should be equality, but I think the degree of inequality in our system overall, is not sustainable. Right? So, I'm looking forward to navigating some of the crises that I think are ahead for the world. Not just geopolitical, but also financial.

26:06And what that will mean for the infrastructure that we're building today. So, I really do believe that we're building infrastructure now not just as a trading venue or, you know, even just okay, we're getting access to some hyper liquid markets. But, I really do believe we're building and helping or contributing to building an infrastructure that the world will have to move towards

26:32once the you know, the fissures in the and the kind of cracks in our current financial system start to make themselves more manifest. We really have some difficult situations on our hand with our money as as a world. And you can see that the stock market just keep giving going up and then

Yeah.

Many people are participating in that,

26:58but not all. So that transition through hard work and crisis is actually the thing that excites me because I think it's what pushes humanity forward.

Yeah, I think a lot's going to happen between now and 2030 or plus or minus 1 year. There's going to be some big events and we've seen other countries with hyperinflation, you know, flock to

27:22to Bitcoin and stablecoins and cryptocurrencies. I'm curious to see how that plays out in Africa as just one of the things that's going to happen. So yeah, there's a lot there's a lot of big shifts happening.

Yeah, there are.

All right. What's the best way to follow your work and you know, the African crypto updates and anything else that if people are

27:45interested in Valar?

Yes, so Valar handle valar.com v a l r d o t c o m on Twitter or X I should say nowadays. You can find me on Farzam Esani f a r z a m e h s a n i. I think those are the main places to follow. But from our perspective, we're also on LinkedIn and other places. But yeah, yeah, that's that's very excited about kind of what's happening

28:14right now, so.

Yeah, definitely. Well, wishing you and the team all the best in growing Africa and bringing that one love and just uplifting humanity to crypto and blockchain bringing back that financial independence and livelihood that everyone deserves whether you're an individual or a bank. You know, crypto is for everyone as you guys say.

Absolutely. Now, thank you for your

28:37time, Ashton. Really enjoyed meeting you and chatting and we'll hopefully do it again soon.

Yeah, thank you.

Bye-bye.

Mhm.