The government formed a working group to draft crypto rules because of concerns that Kenya lacks a framework for regulating the cryptocurrency industry. The nation’s authorities in East Africa are optimistic that the legislation that have been passed will name a single regulatory agency to supervise the cryptocurrency sector.
Kenyan Financial System Is Threatened by Lack of Regulation
A working group tasked with creating cryptocurrency rules was established by the government because of fear that Kenya will be added to the Financial Action Task Force’s (FATF) red list. According to a Business Daily report, this working group is supposed to submit its draft to the Kenyan Cabinet after it is finished.
The article states that the country in East Africa expects the legislation that have been passed to name the regulatory body in charge of the bitcoin sector. The Financial Reporting Centre’s (FRC) Director-General, Saitoti Maika, said that stakeholders in Kenya’s cryptocurrency industry will be informed of the necessary actions if the government accepts the draft.
Maika emphasized the necessity of regulating the cryptocurrency sector, saying:
Most likely, a separate regulator for virtual assets will come into being. We are unable to live in the past. We run a higher danger of punishment the less we control.
FATF Grey List
Kenya, which boasts one of the continent’s most significant cryptocurrency markets, has, like many of its African counterparts, shown a reluctance to establish rules specifically related to cryptocurrencies. The likelihood that Kenya would join the other four East African Community (EAC) members on the FATF’s grey list has increased due to the current situation.
But the creation of a legal structure to regulate the country’s digital asset market may enable Kenyan law enforcement to prosecute individuals who use cryptocurrency assets, like bitcoin (BTC), to launder money. A legal framework of this kind would also give authorities information about how money is moving from the cryptocurrency market into Kenya’s banking system.
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