Thomas Daniels
Kenya’s rapidly evolving digital asset industry is confronting growing concerns over potential regulatory capture as the country moves toward formalizing cryptocurrency legislation. Central to the controversy is the Virtual Asset Chamber of Commerce (VAC), a private think tank reportedly financed by Binance, which is poised to assume an influential role in shaping policy under the proposed Virtual Asset Service Providers (VASP) Bill.
Regulatory Influence Under Scrutiny
According to a report by The Kenyan Wall Street, VAC is slated to be included on the regulatory board that will oversee the implementation of Kenya’s VASP Bill. This board, which also comprises representatives from the Central Bank of Kenya (CBK), the National Treasury, the Capital Markets Authority (CMA), as well as independent legal and accounting professionals, will be central to shaping the country’s crypto governance framework.
Industry stakeholders have voiced alarm over VAC’s alleged financial ties to Binance. Citing confidential documents, the report indicates Binance pays VAC $6,000 per month per country for policy advocacy services. Critics argue this relationship compromises VAC’s independence, turning it into a de facto proxy for Binance in regulatory matters.
“All recent VAC regulatory talks were Binance-sponsored. Now VAC—contractually tied to Binance—gets a seat on the regulatory board? That’s not just unfair, it’s unconstitutional,” one anonymous industry figure told The Kenyan Wall Street.
Broader Regional Implications
Concerns are not confined to Kenya. Observers note that VAC reportedly attempted to insert itself into Rwanda’s crypto regulatory framework under similar pretenses. Critics warn that empowering an entity with perceived conflicts of interest may hinder Kenya’s efforts to exit international financial grey lists maintained by the Financial Action Task Force (FATF) and the European Union.
“If a conflicted organization with a questionable reputation becomes the face of Kenya’s crypto oversight, we risk permanent greylisting,” another stakeholder warned.
VAC Defends Track Record
In response to the allegations, VAC’s director, Basil Ogolla, defended the organization’s credibility, citing a two-year record of engagement with major institutional stakeholders including the CBK, Parliament, and the International Monetary Fund (IMF). “The National Assembly’s decision to include VAC as a nominator reflects the confidence earned through meaningful engagement,” Ogolla stated.
Binance’s Expanding Policy Footprint
The developments in Kenya form part of Binance’s broader strategy of deepening ties with global regulators. In May, Binance signed a memorandum of understanding with Kyrgyzstan’s National Agency for Investments to advance blockchain infrastructure and education. In April, CEO Richard Teng disclosed that Binance is actively advising sovereign governments on the creation of national crypto reserves. Meanwhile, former CEO Changpeng Zhao was recently appointed as an adviser to Pakistan’s newly launched Crypto Council.
Strategic Implications
Kenya’s crypto startups argue that placing a Binance-affiliated entity on the regulatory board undermines competitive neutrality and could entrench foreign dominance in the domestic digital asset sector. As the country seeks to build a robust and inclusive regulatory framework, calls are intensifying for greater transparency, conflict-of-interest safeguards, and broader stakeholder representation.
