Flywheel Advisory founder Grace Mburu./HANDOUTA couple of weeks ago Charles and John (not their real names) stepped into a drinking joint in Lavington, one of Nairobi’s high end estates.
After a couple of drinks, they were hit by Sh27,000 bill that was tax compliant (Electronic Tax Register generated).
However, on complaining, the waiter told them that there was no problem they should just pay their rightful bill of Sh3,700.
This pointed to a possible case of ‘cleaning money.’ This just shows how the players in illicit financial flows are becoming more innovative to navigating the regulatory landscape.
Experts fighting against illicit financial flows in the country are now warning that with such tricks are sinking the country further into the radar of the Financial Action Task Force (FATF) grey list.
Flywheel Advisory - a consultancy specializing in anti-money laundering (AML), forensic accounting, and financial crime investigations, says that there has been a shift and perpetrators of illicit financial flows have devised new ways.
The firms’ executive director and founder Grace Mburu said that the country still has a long way to go in cleaning up its financial systems and tightening regulation—particularly in the fast-growing area of cryptocurrency.
“It's a major concern for Kenya, given that we are in the top three on the African continent in trading cryptocurrencies," Mburu said.
"We are leading in terms of the volumes of crypto that we trade, so there's a lot that needs to be done in terms of awareness of how we can prevent our country and our system from being used by criminals for crypto trading."
Speaking during a multi-stakeholder forum in Nairobi several experts noted that the law is one of the major first steps that will be key to regulate and govern cryptocurrencies.
The managing director, expressed concern about the role cryptocurrencies play in money laundering schemes, particularly as Kenya ranks among the top three African nations in terms of crypto trading volume.
“It’s a major threat because enormous amounts of value can move at the touch of a button. Raising awareness, educating regulators, and enhancing the ability to track transactions on the blockchain are essential,” she said.
Mburu confirmed that such tactics remain common, with criminals opting to launder money through assets like vehicles, real estate, virtual currencies, and intellectual property to evade detection in the heavily regulated banking sector.
Cybersecurity and blockchain intelligence expert, Bright Gameli, underscored the need for public-private partnerships in regulating digital assets.
"Scams like CBEX thrive due to low public awareness. "We must enhance technical capacity in law enforcement to trace crypto transactions and enforce Know Your Customer (KYC) rules for virtual asset providers," said Gameli.
Ethics and Anti-Corruption Commission (EACC), Associate Assistant Director of Asset Tracing Judith Sharmala said the agency has intensified efforts in combating money laundering since being granted investigative authority in October 2023.
"We’ve adopted a ‘follow the money’ approach, leading to significant asset recoveries, in recent years, the EACC has recovered Sh34.6 billion and averted losses of Sh135.9 billion," Sharmala stated.
She highlighted inter-agency collaboration with the Directorate of Criminal Investigations (DCI), Assets Recovery Agency (ARA), and Financial Reporting Centre (FRC), noting that joint investigations and training programs are strengthening Kenya’s financial crime response.
Policy strategist and former government advisor, Professor Peter Kagwanja, critiqued Kenya’s enforcement gaps despite robust institutional frameworks.
"We have the best constitution and policies, but corruption remains normalised. The problem isn’t lack of laws—it’s lack of political will. Corrupt individuals are rewarded, while those acting with integrity face obstacles," Kagwanja said.
Mburu cited the upcoming Virtual Assets Bill, which aims to regulate cryptocurrencies and related digital assets, as a promising step toward stronger governance in the sector.
Once enacted, the legislation is expected to provide critical oversight in a space that has been a blind spot for authorities.
“As scrutiny on traditional banking has increased, we’ve seen a shift toward using alternative assets to move illicit value. Kenya is experiencing a significant rise in blockchain-based transactions, and this is where the focus now needs to be.”
