The Directorate of Criminal Investigations (DCI) has dismissed a warning to Kenyans about a financial opportunity as a Ponzi scheme.
In a statement, the DCI said that the warning had not come from the investigative body and urged Kenyans to ignore it.
The fake warning claimed that the DCI had raised the alarm over a Ponzi cryptocurrency scheme which had been presented as a legitimate investment opportunity.
The DCI also revealed that the scheme operated by promising unsuspecting Kenyans quick profits, only to defraud them afterwards.
The fake warning had urged those who had been approached or invested in the scheme to report to DCI's Economic Crimes Unit or nearest police station.
In Kenya, Ponzi schemes are prohibited by law, as they contravene the Penal Code, the Capital Markets Act and the Proceeds of Crime and Anti-Money Laundering Act.
Anyone caught running a Ponzi or pyramid scheme in Kenya may face a fine of up to Ksh 10 million and/or imprisonment of up to 10 years, although the exact sentence depends on how the offence is charged.
Kenya and Crypto Regulation
The latest comes after Parliament passed the Virtual Asset Service Providers Bill two weeks ago, that seeks to regulate digital assets like cryptocurrencies and put in place clear rules in place for the emerging industry.
The act sets out the Central Bank of Kenya as the licensing authority for issuance of stablecoins and other virtual assets, while the capital markets regulator will license those who wish to operate crypto exchanges and other trading platforms.
The regulations come at a time when Kenyans hold an estimated USD 1.2 trillion (Ksh155 trillion) in virtual assets, with the legislation providing critical safety rails to assure investors and companies that the state is a safe place to develop new opportunities.
A report released by the International Monetary Fund in January confirmed that Kenya used stablecoins to handle international debts when the country was hit with a shortage of US dollars. The report also noted that Kenya used stablecoins to hedge against the shilling as it experienced volatility.
By coming up with such regulations, Kenya is one step away from becoming one of only two African nations, with South Africa being the other, in having laws to govern its digital assets. Presidential assent by President William Ruto is the last step remaining before it becomes law.
