Kenya's Grey-List Status Sparks Fintech Restrictions Amid Crypto Crime Concerns

The Financial Action Task Force (FATF) has retained Kenya on its grey-list following a recent review, prompting fintechs and financial institutions to restrict or block services for users. This move is reportedly due to crypto-related money laundering and fraud in the country.

Compliant stablecoin service providers such as HuruPay have begun restricting USD banking services for customers in Kenya, citing regulatory requirements. Similarly, Wise has restricted accounts and will close them within two months, citing 'some activity against our customer agreement'. These restrictions follow earlier complaints of PayPal blocking access to Kenyan account users.

The FATF grey-list designation was given to Kenya in February 2024 due to poor oversight of virtual assets and cryptocurrencies, inadequate monitoring of non-profit organisations and beneficial ownership structures, and weaknesses in combating money laundering and terrorism financing. The European Commission has also classified Kenya as a high-risk jurisdiction with strategic AML deficiencies.

DCI Kenya, the country's leading crime investigative body, has warned that proceeds of crime are laundered and concealed within real estate and cryptocurrency. The rate of crypto-related crimes continues to increase, prompting authorities to seek training and knowledge to combat these activities.