Kenya is losing millions of dollars to digital currency scammers: Report
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Kenya is losing tens of millions of dollars yearly to digital asset scammers, and the government is doing little to crack down on this rising vice
Kenya is losing tens of millions of dollars yearly to digital asset scammers, and the government is doing little to crack down on this rising vice.
According to data rom the Ministry of Information, Communications and Technology, Kenyans lost Sh13.2 billion (US$93 million) to digital currency scammers in 2022.
A local publication reports that digital currency scammers have taken advantage of Kenya’s lack of thorough rules for digital currency.
Like many of its counterparts, Kenya is yet to formulate any legislation for the industry.
Instead, lawmakers are concentrating on taxing traders, and a bill that is currently before the legislature would like to extend the tax agency’s jurisdiction to digital assets.
President William Ruto recently signed the Finance Act 2023, which will levy a 3% tax on digital asset traders.
According to business attorney Victor Olao, these actions show that the government is aware of the growing use of digital assets in the country.
“There are several loopholes in the laws governing the ownership, management, disposal and other activities involving such assets,” he told the newspaper. He added that the while the Kenyan constitution allows citizens to own any property in any part of Kenya, it “didn’t take into account the fluidity and universality of cryptocurrencies.”
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One of the aspects Kenya has struggled with is categorizing digital assets.
Like most countries globally, it’s torn between declaring these assets to be securities or commodities—the central bank has ruled out categorizing them as currencies.
The closest it has come was a ruling by Judge Mary Muigai in 2019 that digital assets should be treated as securities.
This was after a local company sued the Capital Markets Authority for thwarting its ICO.
The company argued that its token wasn’t a security and the CMA had no business regulating it, an argument the judge dismissed.
Kenya is now a major player in the digital currency industry, ranking top globally in 2020 and 2021 for peer-to-peer trading volume.
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