The lack of a framework has led to the mushrooming of dubious cryptocurrency scams that have defrauded Kenyans of millions.
•The public participation exercise comes at a time when the Directorate of Criminal Investigations (DCI) has issued a caution to Kenyans against the increasing number of scammers stealing from them using cryptocurrency scams.
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The digital asset industry lobby group, The Blockchain Association of Kenya (BAK), has extended the feedback period on its community-led draft Virtual Asset Service Provider (VASP) bill.
The VASP Bill is the outcome of a mandate issued to the association in November 2023 by the National Assembly’s Finance and National Planning Committee.
The BAK was tasked to draft a framework to govern the cryptocurrency industry because the lack of a framework has led to the mushrooming of dubious cryptocurrency scams that have defrauded Kenyans of millions.
The VASP Bill was set to be handed over to the National Assembly Committee on Finance on February 14th, 2023.
However, due to growing interest from new stakeholders such as government agencies and other stakeholders affected by elements of the bill, the association in consultation with its members decided to extend the feedback period.
The association held a stakeholder breakfast on Friday 16th where the Executive Board announced that it will extend the feedback period to a later date.
BAK Board Chairman Michael Kimani called on stakeholders to review and give input on the bill.
“The Virtual Asset Service Provider bill is a significant milestone towards curbing the rampant cryptocurrency-related scams that thrive and continue to defraud Kenyans of millions of shillings because of the lack of frameworks to protect the public,” said Kimani.
If passed, Kimani says the bill would affect a diverse group of stakeholders who may or may not be directly involved in the business of digital assets.
“Therefore, the extended feedback period is intended to invite comments from all stakeholders affected directly or indirectly by elements of the Virtual Asset Service Providers bill.”
The public participation exercise comes at a time when the Directorate of Criminal Investigations (DCI) has issued a caution to Kenyans against the increasing number of scammers stealing from them using cryptocurrency scams.
"The DCI has noticed with concern the increase in reports of loss of hard-earned money by Kenyans to scammers. Scores are being lured to join online cryptocurrency investment platforms and end up losing their investments to fraudsters," DCI stated.
It is for this reason, amongst others, that the association was mandated to draft a bill that sets out consumer protection guidelines and a licensing framework to ensure Kenyans are protected as best as possible.
Since 2015, when the Central Bank of Kenya issued a notice warning banks not to work with cryptocurrency companies, much of the cryptocurrency activity has moved underground where it operates without rein and makes it difficult for government agencies and authorities to deal with.
In addition, legitimate companies that hope to set up formal complaint businesses to service Kenyans are unable to operate in the country.
The result has been there is no clear recourse for addressing cases of fraud arising from cryptocurrency and no established business to serve consumers who are legitimately interested in digital assets.
Kimani notes that the Blockchain Association of Kenya hopes to submit the bill to parliament as soon as it is ready to help protect Kenyans and attract legitimate cryptocurrency businesses into the country.
In the meantime, the lobby group invites its community, and interested stakeholders such as government agencies, international development organizations, and the private sector to participate in its upcoming forums and workshops for education and awareness on the impact of the bill.