This archive report was first published on 16 August 2019.
On August 16, 2019, the Central Bank of Kenya (CBK) issued a warning to Kenyans about unlicensed foreign exchange dealers and platforms in the country.
The regulator outlined key characteristics of such dealers and platforms, warning unsuspecting Kenyans not to fall prey and lose money to the unregulated platforms.
According to CBK, some of the characteristics of unlicensed dealers and platforms include purporting to offer the best forex deals in the market, collecting and receiving funds from customers in exchange for foreign or local currencies, and lacking the requisite licenses issued by CBK or the Capital Markets Authority.
Other characteristics include downloadable platforms from Google Play and Apple App Store, which are aggressively marketed through social media and mass mails, and inadequate anti-money laundering and consumer protection safeguards.
CBK has outlined its procedure for licensing foreign exchange dealers, which includes a non-refundable application fee of Sh20,000 for a new license and Sh10,000 for an outlet of an existing forex bureau.
Additionally, applicants must declare that none of its directors or shareholders has ever been declared bankrupt, participated in the management of a collapsed institution, or been convicted of a criminal offense involving money laundering, tax evasion, or fraud.
CBK within 90 days of the date of application requests for additional information and where it is satisfied, issues a letter of intent to the applicant.
Neighboring country Tanzania has also tightened its currency controls with new regulations on foreign exchange bureaus, in what authorities said is an ongoing fight against money laundering and currency speculation.
