Kenya’s Crypto Startups Sound Alarm Over VASP Bill

Kenya’s crypto entrepreneurs are sounding the alarm over a new bill that would regulate virtual asset service providers (VASPs). Their main concern? That the law could give too much power to a lobby group with close ties to Binance, possibly stifling healthy competition in the country’s growing digital asset space.

According to documents shared with The Kenyan Wall Street, the draft legislation proposes that a private think tank called the Virtual Asset Chamber of Commerce (VAC) be given a seat on the regulatory board that will oversee crypto activities in Kenya.

But not everyone is comfortable with this.

Several industry insiders claim that VAC has led Binance-funded regulatory discussions in the country. They argue that VAC is not independent and essentially acts as a mouthpiece for Binance, one of the world’s largest crypto exchanges.

Binance Allegedly Pays VAC to Shape Kenya’s Crypto Policy

According to the report, Binance pays the Virtual Asset Chamber (VAC) $6,000 per country each month to support its policy advocacy efforts—based on what appears to be a confidential agreement. This revelation has sparked concern among local crypto founders, who fear that such financial backing could allow VAC to influence Kenya’s crypto regulations in Binance’s favor, potentially pushing smaller, homegrown players to the sidelines.

Concerns Over VAC’s Role Extend Beyond Kenya

Critics have also pointed out that VAC has made similar moves in other African countries, including Rwanda, where it reportedly tried to insert itself into that nation’s regulatory process.

One stakeholder warned of the global consequences Kenya could face if it allows a lobby group with potential conflicts of interest to help steer its crypto regulation:

“If a group with a questionable international reputation or clear conflicts ends up shaping our crypto laws, Kenya risks being stuck on the FATF and EU grey lists forever,” they said.

VAC Defends Its Role in Kenya’s Crypto Policy

In response, VAC’s director, Basil Ogolla, defended the organization’s credibility. Speaking to The Kenyan Wall Street, he emphasized that VAC has spent two years engaging with key institutions, including the IMF, Central Bank of Kenya, and Kenyan Parliament.

“The National Assembly’s decision to include VAC as a nominating entity for the regulatory board is a reflection of the trust we’ve built through consistent, meaningful consultation,” Ogolla stated.

Kenya’s Crypto Regulator Will Include Key Government Bodies

Despite the controversy surrounding VAC’s involvement, the proposed regulatory board will not be made up of private entities alone. It will also include representatives from:

• The National Treasury

• The Central Bank of Kenya (CBK)

• The Capital Markets Authority (CMA)

• A qualified lawyer

• A licensed accountant

This mix of public and professional oversight is intended to ensure balanced governance of Kenya’s crypto sector.

Binance Strengthens Global Government Ties

Binance continues to expand its influence on the international stage by building relationships with governments around the world.

In May, the exchange signed a memorandum of understanding (MoU) with Kyrgyzstan’s National Agency for Investments. The agreement focuses on helping the country develop crypto payment systems and promote blockchain education.

Advising Nations on Bitcoin Reserves

During an interview on April 17, Binance CEO Richard Teng revealed that the company is now actively working with several governments. These collaborations involve advising on national crypto strategies, including how to build sovereign Bitcoin reserves and shape future crypto regulations.

“We’ve had a number of governments and sovereign wealth funds approach us about setting up their own crypto reserves,” Teng said.