Kenya's Crypto Bill Sparks Controversy Over Binance's Influence

Crypto firms in Kenya have voiced strong opposition to a proposed bill that would allow a proxy for Binance, a prominent cryptocurrency exchange, to influence policy decisions. The bill, currently under review, has sparked controversy due to concerns about potential undue influence and lack of transparency in the regulatory process. Critics argue that allowing a proxy for Binance to shape policy could lead to conflicts of interest and undermine the integrity of the regulatory framework.

The proposed bill aims to establish a regulatory framework for cryptocurrencies in Kenya, a move welcomed by many in the industry. However, the inclusion of a provision that would allow a proxy for Binance to participate in policy-making has raised eyebrows. Critics point out that this could give Binance an unfair advantage over other crypto firms operating in the country, potentially stifling competition and innovation.

The controversy has also highlighted the broader issue of regulatory oversight in the cryptocurrency industry. With the rapid growth of digital currencies, many countries are grappling with how to regulate this new and complex asset class. In Kenya, the proposed bill represents an important step towards establishing a clear regulatory framework, but the inclusion of the Binance proxy provision has raised concerns about the potential for regulatory capture.

The opposition to the bill has come from a range of crypto firms, including both local and international players. These firms argue that the regulatory framework should be designed to promote competition and innovation, rather than favoring a single player. They also point out that the lack of transparency in the policy-making process could undermine public trust in the regulatory framework.

The debate over the proposed bill is ongoing, and it remains to be seen how the Kenyan government will respond to the concerns raised by crypto firms. However, the controversy has highlighted the importance of transparency and fairness in the regulatory process, and the need for a balanced approach that promotes both innovation and consumer protection. As the cryptocurrency industry continues to evolve, it will be crucial for regulators to strike the right balance between promoting growth and ensuring that the interests of all stakeholders are protected.

Kenya’s draft VASP Bill is set to embed a Binance-linked think tank on its oversight board, according to disclosures. The inclusion of the Virtual Asset Chamber of Commerce (VAC) on the regulatory authority’s board has sparked warnings that the move could tilt Kenya’s digital-asset rules in favor of the world’s largest exchange. The VASP (Virtual Asset Service Providers) Bill, currently before Parliament, names VAC as one of five private-sector nominators to the new Virtual Assets Regulatory Authority. The bill passed its Second Reading on June 25, 2025, and now awaits committee review. Under the draft law, the board will include representatives from the National Treasury, Central Bank of Kenya (CBK), Capital Markets Authority (CMA), a lawyer and an accountant—alongside VAC.

A confidential agreement shows Binance pays VAC $6,000 per country each month for “policy advocacy.” Critics say this ongoing retainer compromises VAC’s independence and signals outsized influence for Binance over Kenya’s crypto regulations. Several Kenyan crypto startups have publicly condemned VAC’s appointment. “All regulation convos by VAC that happened recently have been sponsored by Binance,” one stakeholder said. “Then VAC, a private consulting entity, with a non-compete with Binance ‘magically’ gets a regulatory seat? How is this fair? How is this constitutional?”

Another industry figure warned that Kenya risks remaining on the Financial Action Task Force (FATF) grey-list if a conflicted entity gains regulatory power, adding, “If an entity of poor international reputation or one with clear conflict of interest becomes our crypto regulator, Kenya shall never leave FATF and EU greylists.” VAC director Basil Ogolla defended the think tank’s role, citing a two-year consultation campaign with the International Monetary Fund (IMF), CBK and Parliament as evidence of VAC’s credibility. According to Ogolla, “The National Assembly’s decision to include VAC as a nominator in the regulatory board reflects the trust and confidence built through this track record of meaningful engagement.”

Once the VASP Bill is enacted, the Virtual Assets Regulatory Authority will be staffed by two representatives from the National Treasury, two appointees from the Central Bank of Kenya, and two members from the Capital Markets Authority. In addition, the board will include one nominee each from a lawyers’ association, an accounting body, and the Virtual Asset Chamber of Commerce. Critics note a similar pattern in Rwanda, where VAC reportedly sought to shape that country’s crypto rules. Meanwhile, Parliament’s committee review is scheduled for July 2025. Observers say amendments could remove private-sector nominators or impose stricter conflict-of-interest rules. Kenya’s crypto startups continue to lobby for transparent governance, advocating open hearings and public scrutiny of all advisory contracts.