MPs push law changes to seize cryptocurrency from criminals

Kenya's fight against money laundering is set to extend into the digital space, with Parliament considering changes that would allow investigators to pursue criminals who conceal stolen wealth in cryptocurrencies and other virtual assets.

The proposed reforms would give State agencies a stronger legal foundation to identify, track, freeze and confiscate digital holdings suspected to have originated from criminal activities, closing a gap that has made it difficult to recover money transferred through blockchain-based platforms.

The Directorate of Criminal Investigations (DCI), Ethics and Anti-Corruption Commission (EACC) and National Police Service are among the agencies expected to benefit from the proposed changes to the Proceeds of Crime and Anti-Money Laundering Act.

The proposals were presented by the Assets Recovery Agency (ARA) to the National Assembly's Departmental Committee on Justice and Legal Affairs, which endorsed the move on Tuesday as part of efforts to improve the country's response to increasingly complex financial crimes.

At the centre of the proposed amendments is an expansion of the legal meaning of property to cover cryptocurrencies, virtual assets and other holdings supported by blockchain technology.

ARA argues that the change would remove uncertainty over whether such assets can be subjected to recovery proceedings when investigators establish a connection with criminal activities.

"The expansion of the definition would provide greater legal certainty that assets such as cryptocurrencies can be identified, traced, restrained, seized, forfeited and recovered where they are connected to criminal activity," reads the proposal by ARA.

Under the proposed framework, investigators would be able to pursue digital currencies in the same manner as money held in conventional bank accounts or wealth invested in physical property.

The committee, chaired by Tharaka MP George Murugara, welcomed the proposal, saying it would help authorities respond to financial crimes that increasingly involve digital transactions.

"The amendments are timely in the fight against money laundering. The law will allow investigative agencies to trace, freeze and recover illicit proceeds held or moved through digital currencies just like traditional bank accounts or physical property," said Murugara.

He further noted that the proposed changes were intended to address weaknesses in the existing legal framework.

"The Bill targets to seal operational loopholes in the existing anti-money laundering laws."

The committee is reviewing the amendment Bill before submitting it to the National Assembly Speaker for formal publication and subsequent consideration by MPs.

The push for stronger asset recovery provisions follows a recent operation in the United States, where law enforcement agencies confiscated cryptocurrency valued at more than Sh97 million. The digital assets were linked to a cross-border student-aid fraud network associated with Kenyans.

Cryptocurrencies have become a growing focus for regulators because transactions involving digital assets do not pass through the conventional verification systems used by the Central Bank and financial institutions, although the platforms have their own security checks.

Governments around the world, including Kenya, have consequently been working on regulatory measures to address the risks arising from their use.

Kenya has already introduced several legal measures aimed at strengthening oversight of financial transactions and digital currencies.

Last year, President William Ruto signed the Anti-Money Laundering and Combating of Terrorism Financing Bill, 2025, into law. The legislation was intended to address regulatory and compliance weaknesses that had allowed illicit financial flows through property dealings and the use of shell companies.

Another measure was the Virtual Assets Service Providers Act, 2025, which received presidential assent on October 15, 2025. It established a framework for regulating and licensing businesses operating in the cryptocurrency and digital assets sector.

The latest proposed changes seek to complement these laws by addressing the recovery of virtual wealth suspected to have been acquired through illegal activities.

They also come as Kenya works to meet international standards on preventing money laundering and financing of terrorism, in a bid to secure removal from the Financial Action Task Force (FATF) grey list.

The country was placed on the list in February 2024 and has since stepped up efforts to address weaknesses identified in its financial crime prevention systems.

Meanwhile, DCI Director Mohamed Amin said on Wednesday that detectives had intensified operations across the country to disrupt networks involved in illegal financial transactions.

He said the agency was pursuing those responsible for moving illicit money and ensuring they did not retain the benefits of their criminal activities.

"Our goal is straightforward: to trace illegal financial flows, disrupt criminal networks and deny offenders access to the proceeds of crime and improve investor confidence in the country,” he said.

The proposed legal changes are expected to add another layer to the government's efforts to combat money laundering by ensuring that criminals cannot easily shield their wealth by converting it into digital currencies.