Directorate of Criminal Investigations locks peer-to-peer traders out of funds for over 60 days without formal charges as authorities target terrorism financing and corruption ahead of FATF grey list exit.
Kenya’s Directorate of Criminal Investigations has frozen an undisclosed number of Binance user accounts in what officials describe as a widening crackdown on crypto-linked fraud and money laundering, leaving hundreds of traders unable to access their funds for over two months without formal charges or court orders, according to senior criminal investigators who spoke to TechCabal on Monday.
The move followed complaints on social media from users who claimed they had been locked out of their accounts with little explanation from Binance. Many users said they are unable to access funds tied up in peer-to-peer trades, the channel through which most local retail users convert their crypto holdings into cash, sparking the #BinanceUnmasked hashtag demanding clarity on resolution timelines. In response to affected users, Binance said the restrictions were imposed at the direction of authorities, stating, “We have shared the information of the law enforcement authorities with you, meaning your account has been restricted at the request of law enforcement.”
Senior investigators told TechCabal that some of the affected accounts had been flagged by authorities in other jurisdictions over suspected links to terrorism financing and money laundering. Others, one officer added, are believed to be tied to corrupt local officials who have channeled and warehoused millions of shillings through the platform. “Some of these accounts are being used to move stolen taxpayer funds, and we are seeing an increase as the election period approaches,” the officer said. A second officer said the operation is likely to widen in the coming months.
The account freezes are occurring under the framework of the Virtual Asset Service Providers Act 2025 and implementing regulations expected in 2026, despite the absence of formal charges or specific court orders in many cases. The Prevention of Terrorism Act allows immediate freezes without prior notice against individuals or entities flagged by counter-terrorism authorities. However, affected users report being locked out for over 60 days, with Binance declining to disclose the purpose of the freezes and directing users to contact the Directorate of Criminal Investigations under the National Police Service.
Kenya is working to exit the Financial Action Task Force grey list, with the expected regulations bringing crypto firms into formal regulation and aligning the country with global anti-money laundering standards. Kenya has committed to coming out of the greylist. Expect more crackdowns,” a senior investigator said. The Financial Reporting Centre, the agency mandated to track illicit transactions, has yet to recognize Virtual Asset Service Providers as reporting institutions, though the VASP Act places compliance burdens on crypto firms, including adherence to targeted financial sanctions.
Kenya’s virtual assets market has grown on the back of strong retail adoption, with estimates suggesting over four million Kenyans have had exposure to cryptocurrencies, many operating through peer-to-peer channels that sit outside regulators’ eyes. Binance processed over 71,000 law enforcement requests in 2025, assisting in the seizure of $752 million in illicit assets globally. The lack of transparency during enforcement actions has raised questions about potential abuses of power and lack of due process, with users demanding fairness, transparency, and proper communication throughout any process that affects their access to funds.
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