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A number of cryptocurrency startups are expressing apprehension regarding Kenya’s suggested virtual asset service providers (VASP) Bill, cautioning that it might grant excessive sway to a Binance-affiliated lobby organization, which could jeopardize equitable competition in the nation’s digital asset sector.
According to information revealed to The Kenyan Wall Street, a private think tank known as the Virtual Asset Chamber of Commerce (VAC) will be featured on the regulatory board established under the proposed legislation.
Certain cryptocurrency stakeholders in Kenya assert that VAC has conducted Binance-sponsored regulatory discussions, is lacking autonomy, and serves as a surrogate for the exchange.
“All regulatory discussions by VAC that occurred recently have been financed by Binance. Then VAC, a private consultancy firm, with a non-compete clause with Binance ‘magically’ secures a regulatory position? How is this just? How is this constitutional?” one stakeholder remarked to The Kenyan Wall Street.
Related: Binance’s CZ hints at ‘will function’ for crypto distribution upon death
Binance allegedly compensates VAC
The report suggested that Binance compensates VAC $6,000 for each country on a monthly basis for policy lobbying, referencing a confidential arrangement. This raises concerns that the lobby organization could manipulate Kenya’s cryptocurrency regulations to favor Binance while marginalizing local participants.
Critics have also emphasized parallels with VAC’s alleged initiatives to insert itself into Rwanda’s regulatory framework.
“If a body with a tarnished international reputation or one with evident conflicts of interest assumes the role of our crypto regulator, Kenya will remain on the FATF and EU grey lists perpetually,” cautioned another stakeholder.
In a statement to The Kenyan Wall Street, VAC’s director Basil Ogolla defended VAC’s position, highlighting its two-year initiative of consultations with the International Monetary Fund (IMF), Central Bank of Kenya (CBK), and Parliament.
“The decision made by the National Assembly to incorporate VAC as a nominator in the regulatory board signifies the trust and confidence established through this history of significant engagement,” Ogolla reportedly stated.
Importantly, the new regulatory body in Kenya will also encompass representatives from the National Treasury, the Central Bank of Kenya (CBK), and the Capital Markets Authority (CMA), alongside a legal professional and an accountant.
Cointelegraph reached out to Binance for comment but had not received a response by the time of publication.
Related: Tigran Gambaryan officially resigns from Binance after returning to the US
Binance strengthens connections with governments worldwide
In May, Binance inked a memorandum of understanding (MOU) with Kyrgyzstan’s National Agency for Investments to establish crypto payment infrastructure and blockchain education in the region.
In an interview on April 17, CEO Richard Teng disclosed that Binance is actively advising various governments on developing strategic Bitcoin reserves and formulating crypto regulations.
“We have indeed fielded several requests from a few governments and sovereign wealth funds regarding the establishment of their own crypto reserves,” Teng stated.
Previously, on April 7, former CEO Changpeng Zhao was appointed as an adviser to Pakistan’s newly established Crypto Council, which will supervise the nation’s blockchain and digital asset projects.
Magazine: XRP surges on Ripple-SEC update, Pomp acquires $386M BTC: Hodler’s Digest, June 22 – 28
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