Kenya Forms Special Unit to Crack Down on Crypto Fraud

Kenya launches a specialised crypto fraud unit as losses surge, aligning enforcement with new digital asset laws and regional cooperation.

Kenya has intensified its response to cryptocurrency crime amid rapidly rising losses. Authorities are now looking for a greater level of enforcement with regulatory clarity. Consequently, the major institutional shift has been announced by the Directorate of Criminal Investigations. The move reflects an increase in urgency amid a rise in digital fraud across the country.

Kenya Tightens Enforcement as Crypto Losses Accelerate

Kenya’s Directorate of Criminal Investigations, the DCI, confirmed that a specialized crypto fraud unit had been set up. The decision was prompted by mounting investor losses as well as the growing sophistication of criminals. According to the DCI, local investors lost as much as KES5.6 billion or $43.3 million in 2024. Notably, this was a 73 percent increase on an annual basis.

Moreover, the DCI said that criminals were more and more exploiting the anonymity that is available in online platforms. Therefore, the new unit will have a focus on crypto scams and associated cyber offences. Officials called the initiative a “ruthless” crackdown. The goal is to keep pace with changing digital crime rings.

Related Reading: Bitcoin News: Kenya Sees Bitcoin ATMs Appear Amidst New Crypto Law Rollout | Live Bitcoin News

Rosemary Kuraru, head of the DCI forensic laboratory, explained the agency’s approach. She said that law enforcement needs to innovate at the same pace as criminals. In addition, she emphasised the need for specialised skills as well as advanced tools. Her comments reflected a growing institutional concern.

The announcement was also preceded by a new Blockchain and Cryptocurrency Investigation Training Module. The programme was co-financed from the European Union. It was focused on blockchain forensics and cross-border investigations. According to the DCI, more than ten African countries were represented by officials.

Kuraru said the training was conducted in transaction tracing and wallet investigations. It also addressed exchange related crimes and international best practices. Furthermore, the programme emphasized the cross-border cooperation.

Kenyan authorities reported an increase in enforcement activity this year. Dozens of crypto fraud-related arrests have taken place. The scams reported in the media were for alleged $119,000, $100,000, and $30,000. However, most prosecution outcomes are pending.

Regulatory Reforms Shape Kenya’s Crypto Landscape

Meanwhile, enforcement efforts are being made in conjunction with major regulatory changes. The Virtual Asset Service Providers Act or VASP Act, 2025 came into force on November 4. Presidential assent took place on October 15. The law provides for an extensive licensing and supervision structure.

Under the Act, the Central Bank of Kenya and the Capital Markets Authority are the main regulators. Cryptocurrency is not legal tender, but it is legal. Therefore, the law seeks to elucidate Kenya’s long-standing legal grey area. Authorities say such clarity should help to build market trust.

But so far no licenses have been issued. Regulators Are Still Preparing Implement Regulations. Until then, oversight is transitional. Nevertheless, officials view the framework as a basis for safer growth.

Taxation policy has since changed. Kenya had replaced a controversial three percent tax on digital asset transactions. Instead, there is now a ten percent excise duty on exchange service fees. This change came into effect on 1st July 2025. Policymakers said the move is in favor of fairer participation.

All in all, the losses from cybercrime are still substantial. The DCI cited $231.5 million in lost money to cybercrime in 2024. This put Kenya among the most affected markets in Africa. Investigators have worked on more than 500 cases of digital assets in three years.

The post Kenya Forms Special Unit to Crack Down on Crypto Fraud appeared first on Live Bitcoin News.