In a comprehensive statement when appearing before the Kenyan parliament at the ongoing probe into WorldCoin activities in Kenya, the Cabinet Secretary for National Interior and Administration, Kithure Kindiki, has said cryptocurrency is a possible haven for money-laundering and terrorism financing, and he is ‘reluctant to allow it in the country.’
“Cryptocurrency is not a legal tender [in Kenya], and therefore it falls outside the regulatory framework and ambit of the Central Bank of Kenya . . . . Therefore, it is very difficult to oversight that space. It is a financial-related activity but falling outside the regulator and the regulator of the financial space is principally the Central Bank of Kenya and other support institutions like the Capital Markets Authority.”
– Minister Kithure Kindiki
Discussing the risks of crypto, the Minister said:
“This gap therefore, allows the transfer and trade of cryptocurrencies without any regulatory checks. It encourages anonymity in financial transactions. You cannot trace, you cannot locate the owners and the dealers in the money or the finances that are involved in this space. And for that reason . . . . it is possible to process financial transactions across borders through online platforms. Money can move from one account to another account across borders without the regulatory oversight of the Central Bank and still end up financing criminal activities like terrorism.
I need to be convinced as a security minister that if there are grey areas and we can’t pinpoint the owners of the money and how they have made that money at the crypto trade level until the money finds its way into a financial institution, then at the risk of being accused of being at war with commerce and technology, I would be reluctant to allow it in the country,” Kindiki told a Kenyan parliamentary committee.
“Cryptocurrency is a possible ground for money launderers and terror financiers,” CS Kindiki tells Ad Hoc Committee investigating Worldcoin activities in Kenya pic.twitter.com/uN67MAcnWj
— Citizen TV Kenya (@citizentvkenya) September 14, 2023
Earlier in August 2023, Kindiki’s office suspended the activities of Worldcoin in the country pending investigations.
The 48 Orbs used by Worldcoin to scan eyeballs and the electronic gadgets recovered from the company are currently undergoing forensic scrutiny. pic.twitter.com/Yg7TEjoYSm
— Ministry of Interior | Kenya (@InteriorKE) September 14, 2023
Mr. Kindiki attended the parliamentary inquiry in September 2023 barely a week after Worldcoin CEO, Alex Blania, and Chief Legal Officer, Scott Thomas, appeared before it. The minister claimed that Kenya wanted to hold the officials within its borders but the U.S. embassy intervened promising to hand them back if found guilty.
“They tried to leave the country but were stopped and put in custody, but the U.S. government intervened saying they would be allowed to leave because they haven’t yet been found guilty, but gave an undertaking that it will produce them when required,” Prof. Kindiki noted.
The American company implored the committee to initiate an investigation into the issue and requested that the suspension of their activities, which they claimed had adversely affected their operations in the country, be lifted.
“We want to request that the committee investigates this matter with a view of creating regulations. The company prays that the committee finds that WorldCoin did not engage in any wrong doing, we pray that the suspension be lifted with the necessary legal and regulatory oversight,” Blania said while speaking before the committee.
The committee has until the end of September 2023 to table a report on its findings into the matter.
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