DCI tightens grip as crypto fraud surges in Kenya

By Newsflash Reporter

Kenya’s Directorate of Criminal Investigations (DCI) has intensified its crackdown on the country’s rapidly expanding cryptocurrency fraud networks, following a surge in cases that have seen victims — both Kenyans and foreigners — lose billions of shillings.

The renewed enforcement push was evident on February 28, when detectives arrested two men in Kileleshwa, Nairobi, accused of swindling a Chinese national of Sh6.5 million after impersonating cryptocurrency exchange experts.

Cryptocurrency, a digital asset secured by cryptography and operating on decentralised blockchain systems, has proven attractive to both investors and criminals. According to investigators, the two suspects convinced the foreigner they could facilitate a crypto exchange, only to disappear with the cash. They were later arraigned for conspiracy to defraud, one of the many cases now driving the DCI’s heightened digital surveillance.

Surging crypto con schemes

Just two weeks earlier, prosecutors charged two men in Nairobi with defrauding a businesswoman of Sh15.4 million in a bogus crypto investment operation. The suspects allegedly lured her to a hotel, claiming they would help her trade on Binance. Last month, another group — three men and a woman — allegedly stole Sh13.5 million from a city businessman.

On November 27, DCI detectives arrested yet another “notorious” crypto swindler in Nakuru’s Kiamunyi estate. The suspect, who used the aliases Abdirahman Abdikarim and Jamie Damon, is said to have conned a woman from Kilifi out of Sh3.9 million in what she believed was a genuine investment.

Police linked him to multiple digital scams spanning several counties. “He created a wide network of fake platforms and illegally registered SIM cards to conceal his identity and lure unsuspecting investors,” Nakuru County Police Commander Emmanuel Epuru said.

Detectives traced his digital trail across multiple regions, underscoring the agency’s increasing dependence on advanced cyber-forensic tools to tackle the surge. These cases form part of more than 500 incidents reported in the past three years — a rapid escalation that the DCI says reflects the sophistication of crypto-driven criminal networks. An internal DCI report shows Kenyans lost Sh5.6 billion to crypto fraud last year alone, an alarming 73 per cent spike from 2023.

Cyber losses and cross-border threats

A senior detective said at least Sh6 billion has already been lost this year, though many victims remain silent. A new report — From Risk to Resilience: AI and the Future of Cyber Risk Management — revealed that Kenya lost Sh29.9 billion to cybercrime this year, highlighting the scale of threats now confronting law enforcement. The research, released by the Africa Cyber Immersion Centre, surveyed 280 organisations and mapped growing digital vulnerabilities across the continent.

In Kenya, DCI investigators uncovered a suspected money-laundering scheme valued at Sh55.5 million involving a virtual asset service provider. The findings, officers say, demonstrate how decentralised currencies have become entangled with transnational criminal syndicates. Unlike conventional currencies, digital assets like Bitcoin operate independently of central banks and offer anonymity — a feature increasingly exploited by fraudsters and extremist networks.

New DCI special unit and tightening laws

With comprehensive regulation lagging behind the fast-evolving crypto ecosystem, criminals have capitalised on public enthusiasm and limited awareness to promise high, guaranteed returns. President William Ruto’s State of Security report presented to Parliament in November even lists crypto fraud as a national security threat, citing its use in ransomware, anonymous transactions and criminal financing — concerns that have accelerated the DCI’s reforms.

The agency has established a specialised unit dedicated to tracking and dismantling cryptocurrency-related crime. “We are forming a specialised unit to crack down on cryptocurrency fraud. The DCI is committed to staying ahead of criminal syndicates,” said Rosemary Kuraru, Director of the National Forensic Laboratory. She noted that as criminals migrate to anonymous digital platforms, law enforcement must innovate just as rapidly.

Kenya, home to more than six million crypto holders, has launched an EU-funded programme — the “Blockchain and Cryptocurrency Investigation Training Module” — to equip detectives with the skills needed to investigate digital wallets, trace blockchain transactions and enhance cross-border cooperation. Ms Kuraru said Kenya’s recent placement on an international grey list for gaps in combating illicit flows made such training crucial.

To reinforce enforcement, President Ruto recently signed the Virtual Assets Service Providers Act, 2025. The new law licenses and regulates crypto service providers, mandates strict capital and cybersecurity standards, and requires exchanges, brokers and wallet operators to obtain CMA approval.

Individuals operating without a licence face fines of up to Sh10 million or a 10-year jail term, while companies risk penalties of up to Sh20 million.

The law also requires providers to maintain local offices, appoint at least two directors, report breaches and comply with data protection rules. Legal experts say the greatest weakness remains public awareness. “Lack of awareness fuels crypto fraud,” said Keega Gakuua, a blockchain advocate. Cybercrimes specialist Tom Oduor added that criminals use fake platforms, phishing links and impersonation tactics to steal private keys and empty digital wallets.

Mr Oduor urged investors to remain sceptical, research platforms thoroughly, use strong unique passwords, enable two-factor authentication and avoid high-pressure pitches or celebrity endorsements. According to the 2024/25 Cybercrime Report, cyberattacks in Kenya have continued climbing, leading to losses of at least Sh30 billion — a trend the DCI now hopes to reverse through enhanced enforcement, legal reforms and its new specialised crypto investigations unit.