Some Kenyan cryptocurrency investors are counting their losses after their digital wallets on CBEX were emptied. The incident has raised concerns among regulators and rekindled debate on the need for cryptocurrency regulation in Kenya.
CBEX had gained popularity among Kenyans and West Africans by promising high returns—up to 30% in 30 days—backed by an AI-powered trading system. The platform had referral bonuses, smooth user interface and hassle-free withdrawals. But over the weekend, many users were met with the harsh reality of digital asset volatility and poor regulation: their accounts were wiped clean.
“I had $6,000 (approximately Sh777,000) in my crypto wallet in the morning. By evening, it was gone,” one Kenyan investor told Business Daily. “Some of my friends and relatives experienced the same. It’s terrible.”
AI Promises Turn to Panic
CBEX says the mass account losses were caused by “malicious fraud platforms” that allegedly manipulated its AI-based trading system through aggressive full-margin trades. According to a statement released on Telegram, these were trades designed to contradict the platform’s AI signals, creating artificial market pressure and disrupting automated trades.
“Hackers attacked our system, hedging trades at the very moment AI signals were activated,” the company said.
Full-margin trading means borrowing funds to invest at maximum leverage—amplifying gains but also increasing losses.
Many users are not buying it. CBEX’s decision to charge verification fees for those seeking compensation has raised more concerns.
Pay to Verify?
CBEX has announced that affected users must pay for account verification before compensation is processed. Accounts with less than $1,000 must pay $100 (Sh12,961) while those with over $1,000 must pay $200 (Sh25,929).
“After depositing, compensation will be credited within 1–24 hours,” the platform said.
Many are crying foul, saying this is a classic exit scam. Users are reluctant to pay extra fees, fearing it’s the final nail in the coffin.
Calls for Crypto Oversight Intensify
The CBEX episode is a warning to the risks of unregulated digital trading platforms in Kenya’s growing but fragile cryptocurrency space. The National Treasury through the Virtual Asset Service Providers Bill of 2025 is seeking to regulate the sector.
Under the draft law, the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) will be the main regulators. CBK will regulate crypto payment services while CMA will regulate trading platforms and initial coin offerings (ICOs).
These regulators will also have the power to:
License crypto exchanges and service providers
Approve new digital tokens
Supervise virtual asset promoters
Enforce standards
This is in line with a recent IMF report which showed that more and more Kenyan businesses are using cryptocurrency to pay foreign suppliers – especially during US dollar shortages or rapid shilling depreciation.
Young, Digital, and Exposed
Kenya has 730,000 cryptocurrency users, most of whom are under 40. According to an IMF commissioned market survey by the CBK and CMA, the most popular digital assets among Kenyans are Bitcoin (BTC), Ethereum (ETH) and USDT (Tether).
But without robust regulations, these users are exposed to unregulated platforms like CBEX.
Key Points
CBEX is under fire after users reported missing funds and the company is blaming hackers.
Affected users must now pay for account verification to get compensation – raising fraud concerns.
Kenya’s Treasury is pushing for crypto regulation and the CBK and CMA will be in charge.
The CBEX case could be the catalyst for faster crypto regulation in one of Africa’s most digital economies.