African Countries Tighten Digital Currency Rules to Combat ‘Evolving’ Crypto Crimes
As cryptocurrency-related crimes rise, countries including Kenya, Namibia, South Africa and Nigeria are implementing new crypto-related regulations to balance innovation with consumer protection and risk management.
by Conrad Onyango, bird story agency
After the exposure of Huione Guarantee, described as the world’s largest illicit Telegram-based marketplace for online fraudsters, in mid-2024, African countries are racing to introduce and tighten regulations on digital currency trade.
This exposure uncovered the extent to which cryptocurrency-enabled crime had evolved from opportunistic hacking to more organized crime involving modern criminal enterprise rings, some of which posed as legitimate corporate entities.
In cryptocurrency trading, individuals use tokens — essentially digital currency — to make payments directly to one another through a largely unregulated online system. These tokens have no definitive value, therefore people are willing to pay based on current market rates.
A new report shows criminals are now activating social media platforms like Telegram to disguise their illegal operations, offering a range of crypto-related products, including stablecoins, blockchain services, and crypto exchanges, as bait to lure unsuspecting clients into traditional crimes such as drug trafficking, gambling, intellectual property theft, money laundering, human and wildlife trafficking, and violent crime.
“An array of illicit actors, including transnational organized crime groups, are increasingly leveraging cryptocurrency for traditional crime types,” said blockchain analytics firm Chainalysis in its 2025 crypto crime report.
In such platforms, vendors offer among others, laundering-as-a-service and trade in stolen personal data on an industrial scale.
According to the Chainalysis report, illegal cryptocurrency activities worldwide amounted to US$40 billion in 2024.
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Of the total US$40 billion, US$10.8 billion was received by “illicit-actor org.” Furthermore, Huione and all vendors on their platform have processed over US$70 billion in crypto transactions since 2021, according to the Chainalysis report.
Apex banks and capital markets regulators in Kenya, Namibia, and Nigeria are upping their game to counter these increasingly diverse and professionalized crimes, now also aided by artificial intelligence.
In mid-January 2025, Kenya released a draft policy framework for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) that it said was aimed at establishing a comprehensive regulatory environment that balances innovation with risk management.
The Fintech Association of Kenya said the policy acknowledges a number of issues, such as money laundering, terrorism financing, cybersecurity threats, and consumer protection concerns while addressing Kenya’s increasing use of virtual assets
“The framework’s timing is strategic, coming after the controversial Worldcoin episode and the implementation of a 3% digital asset tax, demonstrating Kenya’s commitment to balancing innovation with regulatory oversight,” said the Fintech Association of Kenya in a LinkedIn post.
If the policy, currently under public participation to collect public views, passes, the Central Bank of Kenya (CBK) and the Capital Market Authority (CMA) will jointly regulate the cryptocurrency industry.
In Namibia, the country’s apex bank also announced in January the issuance of temporary licenses to two virtual asset service providers (VASPs) for six months, during which they are expected to put their houses in order to obtain full licensing.
During this period, the two cryptocurrency companies, Mindex Virtual Asset Exchange and Landifa Bitcoin Trade CC are only permitted to operate in a regulatory sandbox-like environment and are restricted from conducting business with the public.
“The regulatory authorization process involves a two-step approach; upon completing the assessment, a provisional license is issued with specific pre-authorization conditions, and once those conditions have been satisfied, only then can a full operational license be granted,” saidthe Bank of Namibia’s Strategic Communications and International Relations Director, Kazembire Zemburuka in a statement.
By the end of 2024, South Africa had already approved 248 crypto asset service providers while Nigeria, which recently established rules for digital asset issuance and mandated VASPs to set up local offices, has introduced advertising rules for the sector players.
Starting June 30, 2025, virtual asset service providers in Nigeria will need approval from the Nigerian Securities and Exchange Commission (SEC) before engaging third-party marketers or influencers, also known as Finfluencers.
Additionally, these influencers must disclose any paid endorsements to help regulate and control unregulated cryptocurrency advertising.
bird story agency
