Kenya launches specialized arms unit to fight crypto fraud

The Kenya Directorate of Criminal Investigation (DCI) has announced the establishment of a specialized unit to investigate crypto fraud. The decision came after an increase in criminal activity over the past year, which led to mounting losses of up to Ksh5.6 billion ($43.3 million) among local investors.

The new division will focus on cryptocurrency fraud and related cybercrime, as more criminals are taking advantage of online platforms that offer anonymity, the DCI said. The agency described the initiative as a “ruthless” crackdown on cryptocurrency fraud.

Rosemary Krall, Director of DCI’s Forensic Laboratory, said: “We are building a dedicated unit to crack down on crypto fraud. DCI is committed to staying ahead of criminal organizations. As criminals move to digital spaces that provide anonymity, law enforcement must innovate just as fast.”

Number of cryptocurrency frauds in Kenya in 2025 will exceed total in 2024

This so-called crackdown comes amid a sharp increase in reported cryptocurrency scams. Losses for 2024 were $43.3 million, an increase of 73% from the previous year. Overall, Kenyans will lose $231.5 million to cybercrime in 2024, ranking them as one of the most affected markets in Africa in terms of losses due to digital crime.

“The proliferation of digital assets has brought both opportunity and danger. Many Kenyans are using cryptocurrencies for money transfers and alternative financial solutions, but thousands have fallen victim to scammers and lost billions of shillings.” Kuraru said.

Meanwhile, the DCI has not yet released audited or final figures for 2025, but a Kenyan detective reported that losses in the first 10 months of 2025 have already exceeded the 2024 total.

Meanwhile, authorities say enforcement efforts are being stepped up. There have been dozens of arrests related to cryptocurrency fraud this year, according to police announcements and court arraignments. Recent cases cited by Kenyan media include alleged fraud of $119,000, $100,000 and $30,000 in the major cities of Nairobi and Nakuru.

The DCI said it has handled more than 500 crypto-related cases in the past three years. Separately, law enforcement authorities are also pursuing a small number of cases involving the alleged use of digital assets in terrorist financing, which authorities are treating as national security matters separate from fraud investigations.

Digital asset crime is gaining attention at the highest political level. President William Ruto, in his security report to Parliament, noted that the misuse of crypto platforms is a growing threat to Kenya’s digital economy.

“Cybercriminals are exploiting cryptocurrency platforms for fraud, ransomware payments, and anonymous transactions, thereby increasing cybercrime and posing a threat to national security.” Ruto said so.

Kenya’s transition to virtual currency regulation

Cryptocurrency activity in Kenya has grown over the years without dedicated legislation. Exchanges, wallets, and peer-to-peer platforms served Kenyan users, often from abroad. Transaction volumes increased through retail transactions, remittances, merchant acceptance experiments, gaming and token projects.

Kenyans processed nearly $2 billion through the decentralized protocol last year, with around 6.1 million users, according to figures submitted to parliament. This places Kenya third in Africa in terms of chain volume.

The country has also taken a major step forward on the regulatory front. as reported According to Cryptopolitan, in October, lawmakers passed the Virtual Asset Service Providers (VASP) bill. Legalized cryptocurrency activities and introduced licensing requirements. The Central Bank of Kenya said it has not yet issued licenses under the new framework, pending implementation.

Additionally, the country welcomed the launch of a blockchain and crypto research training module co-funded by the European Union. This will equip investigators with specialized skills in blockchain forensics and cross-border digital investigations.

“We took a closer look at tracking and analyzing blockchain transactions, investigating crimes related to digital wallets and cryptocurrency exchanges, applying international best practices in digital forensics, and strengthening cross-border cooperation to combat cross-border digital crimes.” Krall said. This is to encourage supervised innovation rather than outlawing it.