VAC's independence called into question

Kenya’s rapidly evolving crypto sector is facing mounting scrutiny as local startups and industry stakeholders raise alarms over the potential for regulatory capture by Binance, the world’s largest cryptocurrency exchange.

At the heart of the controversy is the proposed Virtual Asset Service Providers (VASP) Bill, which could grant a Binance-linked lobby group significant sway over the country’s digital asset policies.

Under the draft VASP Bill, the Virtual Asset Chamber of Commerce (VAC)—a private think tank with reported financial ties to Binance—has been named as one of five private-sector nominators to Kenya’s new Virtual Assets Regulatory Authority.

This board will also include representatives from the National Treasury, Central Bank of Kenya (CBK), Capital Markets Authority (CMA), a lawyer, and an accountant.

Disclosures reviewed by The Kenyan Wall Street reveal that Binance pays VAC $6,000 per country each month for policy advocacy, fueling concerns that VAC’s independence is compromised and that it could act as a proxy for Binance’s interests.

Critics argue that recent regulatory discussions hosted by VAC were sponsored by Binance, raising questions about fairness and transparency in the regulatory process. A local stakeholder said

“All regulation convos by VAC that happened recently have been sponsored by Binance. Then VAC, a private consulting entity, with a non-compete with Binance ‘magically’ gets a regulatory seat? How is this fair? How is this constitutional?”

Concerns Over Fair Competition and Market Integrity

Kenyan crypto startups fear that by giving VAC a formal role in the regulatory process could tilt new regulations in Binance’s favor, potentially sidelining local players and stifling competition.

The arrangement has drawn comparisons to similar efforts by VAC to influence policy in Rwanda, further intensifying skepticism about its impartiality.

Industry participants warn that if entities with conflicts of interest dominate regulatory boards, Kenya risks remaining on international watchlists such as the Financial Action Task Force (FATF) and the European Union’s grey lists—potentially deterring foreign investment and hindering the country’s access to global financial systems.

In response to criticism, VAC director Basil Ogolla emphasized the group’s two-year track record of consultations with the International Monetary Fund (IMF), CBK, and Parliament, arguing that their inclusion reflects earned trust and engagement with key stakeholders.

Nonetheless, calls for greater transparency and safeguards against conflicts of interest continue to grow within Kenya’s crypto community.

The controversy in Kenya mirrors Binance’s broader strategy of deepening ties with governments worldwide. The exchange has recently signed agreements to support crypto infrastructure and policy development in countries such as Kyrgyzstan and Pakistan, and is actively advising several governments on digital asset reserves and regulation.

The Need for Transparent and Balanced Regulation

As Kenya positions itself as a leader in Africa’s digital asset space, the outcome of the VASP Bill will be pivotal.

Industry voices stress the importance of a regulatory framework that promotes innovation and protects fair competition, ensuring that no single entity—regardless of its global stature—can dominate the future of the country’s crypto market.

The coming months will be critical in determining whether Kenya’s approach to digital asset regulation sets a precedent for balanced oversight or opens the door to monopolistic influence.