Kenyan lobby group advocates new rules for regulating crypto companies. On February 14, 2014, the BAK was scheduled to present the Virtual Asset Service Provider (VASP) bill to the National Assembly Committee on Finance.
This proposed legislation aims to create a regulatory sandbox, enabling the verification and regulation of crypto players before granting them licenses to conduct operations within the East African nation.
Kenyan Lobby Group Regulating Crypto Companies
The VASP bill proposed by BAK also aims to facilitate the operation of businesses within Kenya’s digital asset industry as commercial entities.
The initiative stems from the Kenyan Parliament’s directive to BAK to develop a regulatory framework addressing the cryptocurrency market. This directive was prompted by the proliferation of fraudulent crypto entities, which have defrauded Kenyans of significant sums, exacerbated by the absence of effective countermeasures.
Michael Kimani, Chair of the Blockchain Association of Kenya, elucidated that the bill encompasses a licensing framework dictating how crypto entities will register within the country. Moreover, it incorporates a sandbox mechanism enabling businesses to conduct trials before obtaining official approval to commence operations.
Challenges Faced By Virtual Currency Businesses
Kimani emphasized the challenges faced by virtual currency businesses seeking entry into the Capital Markets Authority (CMA) sandbox due to the lack of a regulatory framework. He highlighted the proposed joint regulatory sandbox, which will involve the participation of multiple regulatory bodies such as the CBK, CMA, and others. This collaborative approach aims to streamline the approval process for businesses entering the sandbox.
The Composition of the Sandbox Is Set To Be Officially Announced By the Cabinet Secretary
The composition of the sandbox, to be officially announced by the Cabinet Secretary, will include representatives from various entities, including the Capital Markets Authority, the Central Bank of Kenya, and the Financial Reporting Centre. Additionally, representatives appointed by the current Cabinet Secretary overseeing information and communication technology affairs, the Nairobi International Financial Centre, the Law Society of Kenya, the Kenya Competition Authority, and the Kenya Revenue Authority will be included.
Response to Concerns Raised By New Players
In response to concerns raised by new players, government agencies, and other stakeholders regarding a provision in the initial draft of the VASP bill, BAK extended the feedback period. This demonstrates a commitment to soliciting input from diverse stakeholders to ensure the effectiveness and inclusivity of the regulatory framework.
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