Some crypto startups have raised concerns about Kenya’s proposed Virtual Asset Service Providers (VASP) Bill, warning that it could grant disproportionate influence to a Binance-linked lobby group and jeopardize fair competition in the country’s digital asset sector.
According to disclosures seen by The Kenyan Wall Street, a private think tank called the Virtual Asset Chamber of Commerce (VAC) will be included on the regulatory board established under the draft law.
Some crypto stakeholders in Kenya claim that VAC has run Binance-sponsored regulatory talks, lacks independence and acts as a proxy for the exchange.
“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?” one stakeholder told The Kenyan Wall Street.
Binance reportedly pays VAC
The report claimed that Binance pays the VAC $6,000 per country each month for policy advocacy, citing a confidential agreement. This raises fears that the lobby group could skew Kenya’s crypto rules to benefit Binance and sideline local players.
Critics also reportedly noted similarities with the VAC’s reported attempts to insert itself into Rwanda’s regulatory process.
“If an entity of poor international reputation or one with clear conflict of interest becomes our crypto regulator, Kenya shall never leave FATF [Financial Action Task Force] and EU greylists,” warned another stakeholder.
In a comment to The Kenyan Wall Street, VAC’s director Basil Ogolla defended VAC’s role, pointing out its two-year campaign of consultations with the International Monetary Fund (IMF), Central Bank of Kenya (CBK), and Parliament.
“The National Assembly’s decision to include VAC as a nominator in the regulatory board reflects the trust and confidence built through this track record of meaningful engagement,” Ogolla reportedly said.
Notably, the new regulatory body in Kenya will also include representatives from the National Treasury, the Central Bank of Kenya (CBK), and the Capital Markets Authority (CMA), along with a lawyer and an accountant.
Cointelegraph reached out to Binance for comment but had not received a response by publication.
Binance deepens ties with governments globally
In May, Binance signed a memorandum of understanding (MOU) with Kyrgyzstan’s National Agency for Investments to introduce crypto payment infrastructure and blockchain education in the country.
In an interview on April 17, CEO Richard Teng revealed that Binance is actively advising several governments on building strategic Bitcoin reserves and crafting crypto policies.
“We have actually received quite a number of approaches by a few governments and sovereign wealth funds on the establishment of their own crypto reserves,” Teng said.
Earlier, on April 7, former CEO Changpeng Zhao was named an adviser to Pakistan’s newly launched Crypto Council, which will oversee the country’s blockchain and digital asset initiatives.
