Kenya’s Crypto Regulator Dispute Deepens as Key Players Pull Back

Kenya’s attempt to establish a dedicated crypto regulator is facing serious pushback — even before it launches. The proposed Virtual Assets Regulatory Authority of Kenya (Varak) was designed to bring structure and oversight to the country’s growing crypto industry. But now, the Kenya crypto regulator dispute is threatening to derail the plan entirely.

At the center of the disagreement is the Virtual Assets Chamber of Commerce (VACC) — a small industry group made up of local crypto startups. Parliament had given VACC a seat on the board of the proposed regulator, hoping it would help represent the sector. But that decision has triggered backlash, with VACC now saying it may walk away from the role altogether.

“We’re reviewing our position. It’s been more trouble than it’s worth,” said VACC Chair Tony Olendo.

Olendo says the group never lobbied for the board seat. But once the announcement was made, other firms in the industry began to question the move — arguing that VACC is too small, not representative enough, and possibly influenced by a dominant member company. The resulting Kenya crypto regulator dispute has forced VACC to reconsider its involvement.

Regulators Are Stepping Back Too

VACC isn’t the only one reconsidering its place in the new structure. The Competition Authority of Kenya (CAK), which was supposed to be one of five government agencies helping lead Varak, has asked to be excluded from the regulator entirely. CAK says it prefers to oversee competition and consumer protection matters independently and collaborate from outside.

Originally, Varak was meant to bring together:

• The Central Bank of Kenya (CBK)
• The Capital Markets Authority (CMA)
• The Communications Authority (CA)
• The Office of the Data Protection Commissioner
• CAK
• VACC (representing crypto companies)

Now, with both VACC and CAK looking to exit, the Kenya crypto regulator dispute is raising questions about whether this framework can still work.

A Divided Industry, A Shaky Start

This standoff reveals a bigger issue within Kenya’s crypto space: fragmentation. While VACC says it welcomes all companies to join, many industry players feel unrepresented and want a direct seat at the table. Some firms have suggested that no single lobby should speak for the entire industry.

Behind the scenes, there are also reports of rivalries between global and regional interests. As Kenya’s crypto market gains attention, competition over who gets a say in future regulation is intensifying — and it’s making the Kenya crypto regulator dispute even harder to resolve.

Why This Matters Now

Kenya is one of Africa’s most active crypto markets, but it remains largely unregulated. The creation of Varak was meant to fix that — bringing structure, accountability, and taxation to the industry. It also aimed to help curb financial crime and protect consumers.

But with internal disputes flaring and institutional partners stepping away, the regulator’s foundation is already cracking. If the Kenya crypto regulator dispute isn’t resolved, this could delay meaningful reforms and leave the space vulnerable to misuse and uncertainty.

What’s Next?

VACC says it’s still engaging with stakeholders and will make a final decision soon. But even if it gives up its seat, the deeper issue of representation remains unresolved. Unless the government can create a more inclusive, trusted approach, the plan to regulate Kenya’s crypto sector may stay stuck in neutral.

The Kenya crypto regulator dispute is a reminder that building strong policy isn’t just about drafting laws — it’s about bringing people together around shared goals. Right now, that unity is in short supply.

Mark your calendars! TechTrends Pulse lands in Nairobi this August! Join top tech leaders, innovators & AI experts for a half-day of keynotes, showcases & sharp insights on business transformation. RSVP now -limited slots available! Register here.

Follow us on WhatsApp, Telegram, Twitter, and Facebook, or subscribe to our weekly newsletter to ensure you don’t miss out on any future updates. Send tips to editorial@techtrendsmedia.co.ke