The rampant proliferation of cryptocurrency scams in Kenya, leading to the defrauding of millions, underscores a pressing need for crypto regulatory frameworks. This urgent issue was addressed during a crucial stakeholder meeting convened in Nairobi on February 16th 2024, organized by the Blockchain Association of Kenya (BAK), alongside Impact Plus and Polygon Labs. The primary agenda of the gathering was to announce an extension to the feedback period for the draft of the Virtual Asset Service Provider (VASP) bill. Mandated by the National Assembly’s Finance and National Planning Committee in November 2023, this bill aims to tackle the challenges posed by the lack of regulation in the cryptocurrency sphere in Kenya.
The Importance of Regulation:
The lack of regulation in Kenya’s cryptocurrency industry has paved the way for unscrupulous individuals to exploit unsuspecting citizens. With no legal framework in place, fraudulent activities have flourished, tarnishing the reputation of cryptocurrencies and causing financial harm to many. In a recent publication by Citizen.digital, Directorate of Criminal Investigation (DCI) issued a warning as Kenyans fall victim of online cryptocurrency investment scam. According to Nations.Africa; “Official data from the Information, Communications and Technology ministry last year indicated that fraudsters made Sh13.2 billion off thousands of Kenyans who thought they were purchasing cryptocurrencies.” Recognizing this urgent need, the VASP bill aims to establish comprehensive regulations to govern the crypto landscape in Kenya. Its objectives are twofold: to protect citizens from scams and to create an environment conducive to legitimate crypto businesses, ultimately fostering economic growth. Initially slated for release in February, the VASP bill’s feedback period has been extended due to the growing interest from a diverse range of stakeholders. This includes government agencies, international organizations, and the private sector. The decision to extend the feedback period underscores the importance of incorporating input from all relevant parties to ensure that the final legislation is robust and effective.
During the stakeholder meeting Chairman Michael Kimani reiterated the significance of the VASP bill in combating cryptocurrency-related scams. He emphasized that the bill represents a crucial milestone in addressing the rampant fraud that has plagued Kenyans. Kimani highlighted the urgent need for regulatory frameworks to safeguard the public from further financial harm.
In conclusion, the extension of the feedback period for the VASP bill signifies a significant step towards addressing the challenges facing Kenya’s cryptocurrency industry. Through comprehensive regulation, the country aims to protect its citizens while creating an environment conducive to legitimate crypto businesses. It’s a pivotal moment in Kenya’s journey towards harnessing the benefits of cryptocurrencies while mitigating the risks associated with them.
