Binance’s Influence on Kenya’s Crypto Regulations Raises Concerns
Cryptocurrency startups in Kenya have expressed concerns about the proposed Virtual Asset Service Providers (VASP) Bill, which they fear could give Binance undue influence through its connection to the Virtual Asset Chamber of Commerce (VAC). The VAC is set to join the regulatory board under the new legislation.
Regulatory Independence Questions
Reports indicate the VAC has faced criticism for its lack of independence. Stakeholders allege the group has hosted regulatory discussions sponsored by Binance. These concerns grew after revelations that Binance reportedly pays the VAC $6,000 monthly per country for policy advocacy, according to a confidential agreement. This financial relationship has raised questions about potential bias in Kenya’s cryptocurrency regulations.
VAC Defends Its Position
Basil Ogolla, VAC’s director, emphasized the organization’s two-year consultation process with the International Monetary Fund (IMF), Central Bank of Kenya (CBK), and Parliament. Ogolla stated the regulatory board inclusion reflects the trust earned through these extensive engagements.
Binance’s Expanding Global Role
The situation highlights Binance’s growing involvement in global cryptocurrency policy. The exchange has signed agreements with multiple governments, including Kyrgyzstan’s National Agency for Investments, and serves as an advisor to Pakistan’s Crypto Council.
Key Points
- The VASP Bill may give Binance-linked VAC significant regulatory influence
- Financial ties between Binance and VAC raise conflict of interest concerns
- VAC cites its extensive policy consultations as justification for its role
- Kenya’s regulatory board will include representatives from key financial institutions
