The Competition Authority of Kenya (CAK) is seeking to be excluded from the proposed joint regulatory body for the crypto currency industry, opting instead to play an independent role in the fast-growing sector.
The consumer protection watchdog said it would best discharge its mandate of safeguarding fair competition and consumer welfare by not joining the Virtual Assets Regulatory Authority of Kenya (VARAK)—the entity proposed to supervise the cryptocurrency and virtual assets sector.
VARAK is to be established under the Virtual Assets Service Providers (VASP) Bill, 2025, following backing from the National Assembly’s Finance and National Planning Committee and industry players.
The authority was initially designed to draw membership from five regulators: the Central Bank of Kenya (CBK), Capital Markets Authority (CMA), Communications Authority of Kenya (CA), Office of the Data Protection Commissioner (ODPC), and CAK, alongside representatives from the Virtual Assets Chamber of Commerce.
But CAK Director-General David Kemei told Business Daily that the authority has written to Parliament to request exclusion from the proposed structure, arguing that CAK should remain an independent arbiter in the sector rather than participate in rule-making within VARAK.
“Our position is that we would like to be an arbiter that is not involved in the decisions being made about that industry so that we are completely independent and can make our decisions independently,” said Mr Kemei in an interview. “We do not want to be involved in the decisions being made in that particular organisation or regulator. It would be better if we are separate, just as we are separate from the Central Bank or the IRA, so we can collaborate, but still protect the rights of consumers independently.”
The VASP Bill, developed by the National Treasury, had initially proposed that only the CBK and CMA oversee the crypto industry, with the CBK supervising money and payment solutions, while the CMA handled investment and capital market products.
However, crypto industry players such as Yellow Card Kenya and Credence Africa urged the parliamentary committee to establish a standalone regulator with broader representation from across key oversight agencies.
“Although still within the financial services industry, [crypto] is not traditional finance, and therefore, introducing a new regulator is better,” argued Yellow Card, a digital asset exchange, in its submission to Parliament.
The Bill is currently at the committee stage and will proceed to the third reading before being subjected to a final vote in the National Assembly. If passed, it will be presented to the President for assent, setting up East Africa’s first formal regulatory framework for virtual assets.
So far, only South Africa and Mauritius have enacted dedicated crypto regulations, despite growing activity in the sector across Africa. In Kenya, the International Monetary Fund has flagged the rapid rise in crypto transactions, warning of gaps in oversight due to the lack of formal regulation.
