Concerns Over Proposed Cryptocurrency Legislation in Kenya
Concerns are growing among cryptocurrency startups in Kenya regarding a proposed bill governing virtual asset service providers (VASP). This legislation may inadvertently grant significant power to the Virtual Asset Chamber of Commerce (VAC), an organization linked to Binance, which critics argue could hinder competitive practices in the nation’s digital asset sector. Reports obtained by The Kenyan Wall Street indicate that VAC is set to have a position on the regulatory committee outlined in the legislation.
Community Reactions and Allegations
Members of the Kenyan crypto community have expressed unease, alleging that VAC has previously operated with funding from Binance for regulatory discussions, raising questions about its impartiality and propriety. One stakeholder commented,
“How is it justifiable for a privately funded entity like VAC, which has shown allegiance to Binance, to suddenly find itself in a decision-making role about regulations?”
Many fear this could compromise fairness in the crypto market, giving an advantage to Binance while potentially marginalizing local enterprises.
Furthermore, it has come to light that Binance is reportedly compensating VAC $6,000 monthly for its advocacy efforts in various countries, which could pose a conflict of interest in crafting policies that favor larger entities over homegrown businesses.
International Implications and Regulatory Concerns
Skepticism about VAC’s influence isn’t confined to Kenya; similar concerns have been raised regarding its interventions in Rwanda’s regulatory landscape. Stakeholders worry that if a group with questionable international standing assumes regulatory responsibilities, it could jeopardize Kenya’s standing with international bodies like the Financial Action Task Force (FATF) and European Union sanctions lists.
Response from VAC and Regulatory Framework
In response to these criticisms, Basil Ogolla, VAC’s director, asserted that the organization has engaged in a two-year dialogue involving entities such as the International Monetary Fund (IMF) and the Central Bank of Kenya, emphasizing that its inclusion in the regulatory committee reflects built trust through substantive contributions to policy-making efforts.
This new regulatory framework will also see members from Kenya’s National Treasury, the Central Bank, and the Capital Markets Authority included in the oversight body, ensuring a variety of perspectives in the ruling process. Cointelegraph has attempted to reach Binance for clarification regarding these accusations but has yet to receive a statement.
Global Engagement of Binance
Globally, Binance is expanding its governmental engagement; for instance, in May, it established a memorandum of understanding with Kyrgyzstan’s National Agency for Investments to enhance crypto payment systems and blockchain education. CEO Richard Teng mentioned in a recent interview that Binance has been actively consulting with multiple governments on developing their Bitcoin reserves and forming crypto legislation. Notably, the company’s former CEO, Changpeng Zhao, has begun advising Pakistan’s new Crypto Council, overseeing the nation’s blockchain and digital asset strategies.
