Kenya has frozen an undisclosed number of Binance user accounts in its first major crackdown on the booming cryptocurrency industry amid global concerns that digital currencies are being used for fraud, money laundering, and financing terrorist activities.

The government has ordered Binance, the world’s largest cryptocurrency exchange, to suspend the accounts for investigation.

Some Kenyan Binance users have reported that their accounts have been blocked without communication from the company, making them unable to convert their crypto holdings into cash.

Binance on Wednesday acknowledged the accounts freeze.

“Accounts restrictions may occur for a range of reasons for several reasons, “including adherence to applicable laws, regulatory requirements, and our internal compliance policies,” the firm told the Business Daily via email.

“In certain circumstances, actions may also be taken in accordance with requests from relevant authorities.”

The company declined to comment on the nature of the investigation or the government agencies involved.

In a message to one of the customers, which was published on social media, Binance says, “Your account has been restricted at the request of law enforcement.”

It is the first such crackdown in the sector since Kenya passed a new law governing the use of virtual assets in October last year.

Cryptocurrencies have raised concerns among regulators globally due to their susceptibility to illicit activity.

For Binance, the Kenya accounts freeze comes as the cryptocurrency platform faces global scrutiny over accusations of money laundering and aiding US-designated terrorist organisations, including Hamas and Hezbollah, move money.

Because they operate on blockchains without relying on central authorities like banks or governments, criminals have been using them to avoid detection.

Cryptocurrency exchanges provide a platform for users to buy, sell or swap cryptocurrencies using fiat money (government-issued currency like the US dollar) or other digital assets.

Binance is the world’s largest exchange, with over 300 million users and $34 trillion traded on the platform in 2025.

Kenya has seen a significant increase in cryptocurrency use over the past three years, driven by the adoption of stablecoins for remittances, merchant payments and cross-border transactions.

The country was ranked fifth worldwide in transaction volume in a 2025 report by the global exchange platform Bybit.

But the sector has also been exploited by criminals seeking to move large sums of money with a lower risk of detection. Last October, Interpol flagged 14 suspects in Kenya for financing of terrorism activity through crypto and arrested four of them as part of an Africa-wide operation.

The scheme was worth approximately $430,000 (Sh55.55 million), the international police body said. Interpol also arrested two other Kenyan suspects for allegedly running a terror group recruitment financed through a crypto trading platform.

Globally, Binance has been accused of failing to stop hundreds of millions of dollars of cryptocurrency from flowing through suspicious accounts on its platform.

Some of the money has been linked to a network accused by the US government of secretly moving money for Iran and Lebanon’s Hezbollah militant group.

In 2023, the company reached a landmark $4.3 billion criminal settlement with the US government, the largest in corporate history, to resolve allegations of anti-money laundering violations and unlicensed money transmitting.

To settle its plea, Binance pledged to overhaul compliance, appoint monitors and strengthen anti-money laundering controls to block illicit funds from flowing through its exchange.

Still, a 2025 investigation by the Financial Times newspaper accused the company of letting suspicious trade on the platform despite links to terror-financing networks, improbable login patterns and failed identity checks.

Last October, US President Donald Trump pardoned Binance founder Changpeng Zhao after admitting to not maintaining an effective anti-money laundering programme at the firm. The company is also under investigation in France for allegations of money laundering and tax fraud.

Kenya has been under pressure from global bodies such as the International Monetary Fund (IMF) and the Financial Action Task Force (FATF) to tighten its crypto oversight.

The Paris-based FATF added Kenya to its list of countries under special scrutiny in February 2024 due to loopholes in countering money laundering and terrorism financing.

When a country is grey-listed, its banks face tighter due diligence from foreign lenders, some international transactions are delayed, and investors flag compliance risk in country assessments.

In response, Kenya has moved to enact the Virtual Asset Service Providers (VASP) Act, 2025, and aims to operationalise Anti-Money Laundering and Countering the Financing of Terrorism Committees. The country hopes to be removed from the global financial crimes watchdog’s ‘grey list’ by May 2026.

Read: New crypto rules could lift Kenya from FATF grey list, say analysts

The new law places platforms dealing in Bitcoin, stablecoins and non-fungible tokens (NFTs) under the joint supervision of the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).

Virtual assets firms are required to report suspicious transactions and cooperate with agencies such as the Financial Reporting Centre (FRC) and the Directorate of Criminal Investigations (DCI).

Binance was initially based in China when it was founded in 2017, but currently has no official company headquarters.

“Binance is committed to maintaining the highest standards of compliance and works closely with regulators and law enforcement worldwide to support a secure and trusted ecosystem,” the company said on Wednesday.

→ dmusau@ke.nationmedia.com

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