Kenya creates specialised crypto-fraud unit after $43M investor losses

Kenya’s Directorate of Criminal Investigations (DCI) has formed a specialised crypto-fraud unit in response to rising digital-asset crime and investor losses estimated at KES 5.6 billion (about $43.3 million) in 2024 — a 73% year‑on‑year increase. The unit will focus on scams, wallet and transaction tracing, exchange-related crimes and cross‑border investigations. The DCI launched a Blockchain and Cryptocurrency Investigation Training Module, co-funded by the EU, to train investigators from over ten African countries in blockchain forensics and tracing. Investigators say they have handled more than 500 digital-asset cases over three years and made multiple arrests in 2025, though many prosecutions remain pending. The enforcement drive coincides with regulatory changes: the Virtual Asset Service Providers (VASP) Act, 2025 came into force on 4 November 2025, establishing a licensing and supervisory framework under the Central Bank of Kenya and the Capital Markets Authority. Cryptocurrency remains legal but is not legal tender; tax policy changed from a 3% digital-asset transaction tax to a 10% excise duty on exchange service fees effective 1 July 2025. Regulators have yet to issue VASP licences and are preparing implementing rules. For traders: expect increased compliance scrutiny, stronger cross‑border forensic capabilities, and sustained enforcement that may reduce fraud-driven volume in the near term but could improve market integrity and institutional confidence over time.