Kenyan Crypto Firms Voice VAC Board Appointment Concerns
Cointelegraph reports that Kenya's proposed VASP Bill faces opposition from local crypto startups. The Virtual Asset Chamber of Commerce (VAC) will gain a seat on the regulatory board. Critics claim VAC receives $6,000 monthly from Binance for policy advocacy work.
Local stakeholders question the appointment's fairness. One told The Kenyan Wall Street that VAC runs Binance-sponsored regulatory discussions. The stakeholder questioned how a private consulting entity with Binance ties gets regulatory power.
The controversy centers on perceived conflicts of interest. VAC director Basil Ogolla defended the organization's two-year engagement with IMF and CBK. He said the National Assembly's decision reflects trust earned through meaningful consultations.
IMF Technical Report confirms Kenya must enact FATF Recommendation 15 by April 2025. The Technical Working Group started work in March 2024 to develop regulatory recommendations. The framework will address money laundering risks in virtual asset markets.
Why This Matters
Kenya processes $105.6 billion worth of cryptocurrency annually, according to Chainalysis. The country ranks fifth globally in crypto adoption. Over 4.25 million Kenyans own digital assets, representing 8.5% of the population.
NJAGA Advocates notes the VASP Bill 2025 will require licensing for all crypto service providers. Companies must obtain approval from the Capital Markets Authority or Central Bank. The bill also mandates compliance with anti-money laundering requirements.
Coinpedia reports that five government agencies will oversee crypto operations. These include the National Treasury, Central Bank, and Capital Markets Authority. The framework aims to position Kenya as Africa's crypto hub.
Statista projects Kenya's digital asset market will reach $40.82 million in 2025. User penetration stands at 1.38% with growth expected through enhanced regulatory clarity. Mobile money integration drives adoption among unbanked populations across the country.
The regulatory board will include representatives from multiple government agencies. A lawyer and accountant will also join the board alongside VAC. This multi-stakeholder approach aims to balance diverse interests in crypto regulation.
Industry Implications
The VAC appointment raises regulatory capture fears across emerging markets. BitcoinEthereumNews reports that similar patterns emerged in Rwanda's regulatory process. Critics worry about FATF grey list implications if conflicts of interest persist.
Daily Nation reveals that 31% of Kenyan banks want crypto partnerships according to CBK surveys. South Africa experienced investment growth after passing crypto-friendly regulations. Kenya expects similar results after the bill becomes law.
Techpoint Africa explains that Kenya faces FATF assessment deadlines. The country must address money laundering risks in crypto markets. Eastern and Southern Africa Anti-Money Laundering Group monitors Kenya's progress closely.
Crypto Daily notes the bill includes a controversial 3% digital asset tax. Stakeholders debate whether this tax will deter innovation and investment. The government maintains the tax ensures proper revenue collection from crypto activities.
BeInCrypto reports Binance recently tightened compliance rules in South Africa. The exchange now requires detailed sender and receiver information for transactions. Kenya may follow similar compliance patterns after VASP implementation.
Africa Newsroom shows Binance expanded mobile money payments across six African countries in 2025. The company partnered with AltSchool Africa for education initiatives. These activities demonstrate Binance's growing influence across African crypto markets.
Capital FM Business covered the Kenya Blockchain Conference where 1,500 participants discussed VASP regulations. Binance powered the event alongside other major crypto companies. Regulatory debates dominated discussions as stakeholders sought clarity on implementation timelines.
The bill's passage could set precedents for other African nations. Uganda, Tanzania, and South Sudan watch Kenya's regulatory approach closely. Success or failure will influence regional crypto policy development across East Africa.
Smaller exchanges fear market consolidation under the new framework. Compliance costs may force local startups to exit the market. This could concentrate power among established players with deeper resources.
Afriwise examines how the bill addresses pump-and-dump schemes targeting Kenyan investors. Only licensed companies can launch ICOs under the new rules. Penalties reach KES 30 million or 10 years imprisonment for violations.
International observers monitor Kenya's approach to crypto regulation. World Economic Forum notes global regulatory coordination remains essential for cross-border crypto markets. Kenya's framework could influence international best practices for emerging economies.
Related Reading on BTC Peers
BTC Peers offers insights through their Global Bitcoin Policy Index. The index analyzes regulatory frameworks across different countries. Readers can compare Kenya's approach with other African nations' crypto policies.
