The Blockchain Association of Kenya (BAK) has launched a
community-led draft Virtual Asset Service Provider (VASP) bill to address the
rampant cryptocurrency scams defrauding Kenyans. The lack of a regulatory
framework has allowed these scams to flourish, prompting the association to
take proactive measures. Through extensive public participation, stakeholders
are invited to provide feedback on the proposed bill, which aims to protect
consumers and legitimize the cryptocurrency industry in Kenya.
Key Points:
- Mandate
and Purpose: In response to the surge in cryptocurrency-related scams,
the National Assembly’s Finance and National Planning Committee tasked the
BAK with drafting a regulatory framework. The VASP bill seeks to establish
guidelines for virtual asset service providers to safeguard consumers and
promote trust in the digital asset industry.
- Extended
Feedback Period: Due to increased interest from stakeholders,
including government agencies, the BAK has extended the feedback period
for the draft bill. This allows for broader participation and input from
individuals and organizations directly or indirectly affected by the
proposed regulations.
- Stakeholder
Engagement: The BAK emphasizes the importance of stakeholder
engagement in shaping the VASP bill. Board Chairman Michael Kimani
encourages all interested parties to review the draft and provide
constructive feedback. The goal is to address diverse stakeholder interests
and concerns comprehensively.
- Consumer
Protection: The public participation exercise coincides with warnings
from the Directorate of Criminal Investigations (DCI) regarding
cryptocurrency scams targeting Kenyans. The VASP bill aims to establish
consumer protection guidelines and a licensing framework to mitigate fraud
and safeguard investors' interests.
- Regulatory
Challenges: Cryptocurrency activities have largely operated
underground since the Central Bank of Kenya's cautionary notice in 2015,
hindering legitimate businesses and consumer protection efforts. The
proposed bill seeks to address these challenges by providing clear
regulatory guidelines and fostering a conducive environment for legitimate
cryptocurrency businesses.
- Future
Outlook: Once finalized, the BAK intends to submit the VASP bill to
parliament for consideration. By establishing a robust regulatory
framework, Kenya aims to attract legitimate cryptocurrency businesses
while protecting consumers from fraudulent schemes.
Conclusion:
The initiative led by the Blockchain Association of Kenya
underscores the importance of regulatory oversight in the cryptocurrency space.
Through collaborative efforts and extensive public participation, the proposed
VASP bill aims to combat crypto scams, enhance consumer protection, and promote
transparency in the digital asset industry. By engaging stakeholders and
addressing regulatory challenges, Kenya seeks to position itself as a leader in
responsible cryptocurrency regulation, fostering trust and innovation in the
emerging digital economy.