Non-regulation of virtual currencies: The chink in the anti-corruption armour

Kimani, Anthony Ndichu
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Strathmore University
For a long time and with little success, Kenya has battled the vice that is corruption and misappropriation of public funds. Presently, with the emergence and continuous growth of digital currencies also known as virtual or cryptocurrencies, the scales are threatening to tip and not in any way to Kenya’s favour. This paper demystifies virtual currencies in particular Bitcoin and attempts to identify ways in which loopholes in the law that might lead to the fight against corruption to be lost may be sealed. This project analyses the laws presently available locally to fight money laundering in comparison to other jurisdictions and the steps they have taken to try and stay ahead of the curve. In terms of methodology, this project is doctrinal in nature. There is reliance on statute, caselaw, books, journals, reports, newspapers, and internet resources which have been reviewed and analysed to provide the information used in the study. The major finding in the paper is that most jurisdictions are opting to attempt to regulate cryptocurrencies in as far as the role it plays in money laundering is concerned. Another finding is that in all these states, regulation takes place at the exchange level where bitcoins are exchanged for regular fiat currency. The conclusion was then drawn that Kenya can do the same to capitalize on Bitcoin’s promising influence and curb money laundering.
Submitted in partial fulfilment of the requirements of the Bachelor of Laws Degree, Strathmore University Law School