The Competition Authority of Kenya (CAK) has turned down a proposal to join the Virtual Assets Regulatory Authority (VARA), a multi-agency task force formed to oversee the regulation of cryptocurrency activities in the country.
The CAK cited a lack of mandate in overseeing the sector as the primary reason for declining the invitation to sit on the Technical Working Group on Crypto Assets, a team constituted to draft policies on crypto regulation and oversight.
“The Authority is not a member of the Technical Working Group on Crypto Assets as its mandate, as provided for under the Competition Act No. 12 of 2010, does not extend to this sector,” CAK director-general Adano Wario told Business Daily.
[TECH] REGULATION | Digital Sellers, Tech Firms in Kenya Face KES 10 Million (~$80,000) Fines, 5-Year Jail Term for Breaking Upcoming Competition Rule: Online businesses and digital platforms in Kenya could .. https://t.co/8n8bOIwHh8 via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) July 6, 2025
This development comes even as the multi-agency team moves to develop a framework for regulating crypto assets, which have grown in popularity among Kenyans despite the absence of clear laws or regulatory guidance.
The Technical Working Group, composed of officials from:
The Central Bank of Kenya (CBK)
Capital Markets Authority (CMA), and
The Financial Reporting Centre (FRC),
was set up following a Cabinet directive in 2022 to examine and propose a regulatory approach to digital assets.
Other members include:
The Kenya Revenue Authority (KRA)
The Ministry of ICT
The Office of the Attorney General
The National Police Service, and
The Assets Recovery Agency (ARA).
The task force is expected to finalize its policy recommendations for consideration by Parliament.
While several countries globally have already enacted regulations governing crypto activities including:
Taxation
Consumer protection, and
Anti-money laundering measures
Kenya is still at the early stages of formulating a legal framework.
The rejection by CAK means that Kenya’s key competition watchdog will not have a voice in shaping how digital markets – particularly those involving crypto trading platforms – are governed, despite growing concerns over consumer protection and fair competition in the fast-evolving fintech space.
“How did VACC gain the same equal standing as the Governor of the @CBKKenya and other govt regulators, as a private entity with global players such as @binance and @circle publicly documented as VACC clients/ members?” inquired a stakeholder.@MzalendoWatch @KuriaKimaniMP https://t.co/lvawJ4InQB
— BitKE (@BitcoinKE) June 27, 2025
So far, the VARA board and its constitution has been marred with claims of regulatory capture. A recent post on the Kenyan WallStreet publication claims collusion involving an advocacy group and a crypto exchange. The proposed regulation also saw the private advocacy group added onto the upcoming regulatory board.
The post claims the Chamber was paid $6,000 per month per country to commit to strategic advocacy, regulatory engagement, and the drafting of model frameworks, all while providing @binance with regular updates and influence over key activities. https://t.co/lvawJ4InQB
— BitKE (@BitcoinKE) June 27, 2025
Industry players have expressed concern in regards to how a private advocacy group was added onto a regulatory body together with other regulators such as the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA Kenya).
According to the post, @vaspchamber, a private company, will be included in a newly formed regulatory board enshrined in the proposed law together with @CBKKenya @CMAKenya and @KeTreasury https://t.co/lvawJ4InQB pic.twitter.com/CRnjR6icHz
— BitKE (@BitcoinKE) June 27, 2025
A respected digital assets lawyer has also expressed concern in how the VARA board is constituted saying there is direct conflict of interests when a private advocacy group, which represents its clients, is also part of a regulatory body.
OPINION | Why the Upcoming Kenya Virtual Assets Regulatory Authority (VARA) Has Serious Governance Red Flags
In a detailed article, Muthoni Njogu, a seasoned Kenyan digital assets lawyer takes an objective look at how VARA is constitutedhttps://t.co/oRO8eVtltR @KeTreasury pic.twitter.com/qGyEMeug06
— BitKE (@BitcoinKE) June 28, 2025
Following uproar and continued interference in the upcoming bill, the Kenya government temporarily withdrew the bill for revision.
The Kenya govt just hit pause on the flawed VASP Bill after public outcry.
The bill risked regulatory capture, weak AML safeguards & unchecked influence by private actors.https://t.co/tHDj3nFoc3#CryptoKE #RegulateRight #AntiCorruption #VASPBill #AML #CryptoRegulation pic.twitter.com/CeQJIIjGmL
— BitKE (@BitcoinKE) July 3, 2025
As the country struggles to control and manage the increasing use of cryptocurrencies, with an increase in crime facilitated by cryptocurrencies, the need for a truly neutral regulatory body that will serve the interests of the country will continue to be an ongoing concern even as the debate on accountability and good governance continues to pick pace.
CRYPTO CRIME | Kenyan Bank Loses Over KES 500 Million (~$4 Million) in Sophisticated IT System Breach Involving USDT Stablecoin Laundering
This case reflects a growing trend in Kenya where $USDT is increasingly being used to obfuscate illicit funds.https://t.co/pIdhPHem0I pic.twitter.com/STCG2PDfeU
— BitKE (@BitcoinKE) July 10, 2025
Stay tuned to BitKE for deeper insights into the evolving Kenyan crypto crime and regulatory space.
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