The draft Virtual Asset Service Providers (VASP) Bill in Kenya is raising significant concerns among market participants due to potential influences from Binance.
Discussion of Kenya's Crypto Bill
According to updates, the VASP Bill plans to include a Binance-linked think tank on its oversight board. This has sparked criticism from Kenyan crypto startups concerned that the regulations may favor the world's largest exchange.
The bill, currently before Parliament, has passed its Second Reading and is awaiting committee review. The regulatory body will consist of representatives from the National Treasury, Central Bank of Kenya, and Capital Markets Authority, along with a nominee from VAC.
VAC's Defense and Reputation
VAC director Basil Ogolla has defended the think tank's role in crypto regulation, citing a two-year consultation with the IMF and Parliament as evidence of its credibility. He noted that the National Assembly's decision to include VAC as a nominator reflects trust built through significant engagement.
However, critics point to the financial support VAC receives from Binance, amounting to $6,000 per country each month, as a potential conflict of interest.
Response to the Bill and Future Actions
Critics emphasize the risks of poor international reputation for Kenya if a conflicted entity gains regulatory power. In response to current initiatives, startups continue to advocate for transparency and open hearings regarding all advisory contracts.
The parliamentary committee is scheduled to review the bill in July 2025, during which amendments may either remove private sector nominators or impose stricter conflict-of-interest regulations.
The discussion surrounding Kenya's crypto bill raises important questions about the influence of private organizations on the regulation of digital assets, which could impact the future of cryptocurrencies in the country.
