Suspected money laundering criminals who convert illicit cash into cryptocurrency and other digital assets to disguise its origin, will soon have nowhere to hide, as MPs push for a law that will enhance recovery of such hidden proceeds.
Legislators are pushing for amendments to the anti-money laundering law, to empower agencies such as the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC) and the National Police Service, to legally trace, freeze and seize cryptocurrencies and other block chain assets linked to illicit activities.
Cryptocurrency is a digital or virtual form of money that does not require a Central Bank or financial institution to verify transactions but has its own system of security checks. Governments across the world, including Kenya, have in recent years been working on various regulatory measures.
MPs push for a law that will enhance recovery of hidden proceeds of "wash wash".
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The law, once passed by Parliament, 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.
On Tuesday, members of the National Assembly’s Departmental Committee on Justice and Legal Affairs (JLAC) backed the proposal by the Assets Recovery Agency (ARA) to amend The Proceeds of Crime and Anti-Money Laundering Act.
The amendments are contained in a Legislative Proposal submitted by ARA to the National Assembly; dubbed the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2026 which is before the committee.
According to ARA, the proposal seeks to strengthen asset recovery laws and close enforcement gaps by identifying virtual assets (including cryptocurrencies) as property that can be seized when linked to criminal activity.
The ARA has made a proposal to expand the definition of “property” in the to include virtual and other block-chain based assets.
"The expansion of the definition would provide greater legal certainty that assets such as crypto-currencies can be identified, traced, restrained, seized, forfeited and recovered where they are connected to criminal activity," reads part of the proposal by the ARA.
The agency further says the proposal would align the Act with the organisational structure of ARA, by including the directors among members of staff that may be appointed by the agency for proper discharge of its functions.
Committee Members led by Chairperson George Gitonga Murugara (Tharaka MP) noted that the Legislative Proposal was progressive especially in tackling modern financial crime through asset recovery.
"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, “saidMr Murugara.
He added, "The Bill targets to seal operational loopholes in the existing anti-money laundering laws,.
The committee is scrutinsing the amendment Bill before it forwards it to the National Assembly Speaker for formal publication and introduction in the House.
National Assembly Departmental Committee on Justice and Legal Affairs chairperson and Tharaka Constituency MP George Gitonga Murugara appears before the National Assembly Budget and Appropriations Committee on Monday, March 23, 2026.
Photo credit: Dennis Onsongo | Nation Media Group
The proposal comes days after the United States of America law enforcement agencies seized more than Sh97 million in cryptocurrency linked to a transnational student-aid fraud network linked to Kenyan nationals.
The crackdown was part of Operation Ghostbusters, a nationwide US Department of Justice investigation targeting a massive "Ghost student" fraud scheme in the US.
Last year, President William Ruto signed the Anti-Money Laundering and Combating of Terrorism Financing Laws Act ,2025, into law.
The law sought to seal critical regulatory and compliance gaps that enabled money laundering and illicit financial flows through property transactions and the use of shell companies.
Kenya also passed the Virtual Assets Service Providers Act,2025, which was assented to on October 15,2025, to formally regulate and license cryptocurrency and digital asset businesses in the country.
However, a gap still exists as investigative agencies are not able to legally trace, freeze and seize cryptocurrencies and other block chain assets linked to illicit activities.
The proposed amendments now seek to strengthen the fight against money laundering and terrorism financing in the country, amid advancements in technology.
The proposed amendment also seeks to build on Kenya's ongoing efforts to exit the Financial Action Task Force (FATF) " grey list " and align domestic laws with global financial crime standards.
Kenya has been pushing for an exit from the FATF grey list, following its placement in February 2024.
Kenya is under increased international scrutiny, following its placement on the Financial Action Task Force (FATF) grey list, a designation applied to countries with strategic deficiencies in combating money laundering and terrorism financing.
Stung by the blacklist as an epicenter of money laundering in the world, Kenya has in the past months intensified a crackdown against money laundering with hopes of being removed from the global financial crimes watchdog's grey list.
The Paris-based Financial Action TaskForce (FATF)in February 2024, added Kenya to the list of countries under special scrutiny over money laundering, due to loopholes in countering the vice.
FATF is a body that monitors the fight of money laundering and terrorism financing in the world. It acts as the international benchmark for combating financial crimes.
Meanwhile, the DCI boss Mohamed Amin on Wednesday revealed that detectives have intensified a nationwide crackdown on illicit financial flows, which also involves specialized training for officers, aimed at strengthening the country’s fight against money laundering and terrorism financing.
"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," revealed Mr Amin.
He added: "We must deal firmly with money laundering and illicit financial flows in the country. The grey listing of Kenya not only exposed systemic weaknesses, but also cast a shadow over investor confidence, financial stability and the country’s global reputation."
He warned that Kenya's grey listing carries far-reaching consequences, including reduced foreign investment, heightened scrutiny of financial transactions, and increased cost of doing business.
The DCI boss further revealed that in the past six months, over 500 officers have undergone specialised investigations training, under the Financial Investigations Unit to combat money laundering in the country.
As financial crimes increasingly exploit technology and cross-border networks, the new law is expected to enable detectives to better trace illicit funds, freeze criminal assets and build stronger cases for prosecution.
