Kenyan crypto trader implicated in $449,000 investment scam detained for 7 days

In a court ruling in Nairobi, Kenya, a suspected crypto trader linked to a Ksh58 million investment scam has been detained for 7 days. Nyakango Dickson Ndege, tagged as a Binance P2P trader, was arrested while attempting to withdraw funds from an account under investigation.

DCI officers from the Capital Markets Fraud Investigation Unit found millions of shillings that were being channeled to investment fraud applications via bank transfers, paybill services, and mobile money platforms.

Arrest at I&M Bank branch sparks immediate probe

Nyakango was arrested at an I&M Bank branch on Kenyatta Avenue, Nairobi. According to court documents, Nyakango was reportedly seeking to withdraw money from one of the many accounts credited with a total of about Ksh33.67 million ($261,000) from April 8 to April 29, 2026. 

Based on the exchange rate as of May 7, 2026, approximately 129.2 KES/USD, the fraud case amounts to more than Ksh58 million, equivalent to about $449,000, which is the total amount credited to the specific accounts.

The prosecutors informed the Milimani Law Courts that the suspect’s activities are part of a much larger fraud scheme with intricate financial tracks spanning many victims. 

The judge approved the DCI’s request to detain Nyakango at Kilimani Police Station, during which further research into the digital platforms used by the suspect and the identification of any accomplices would be conducted.

According to court documents, the case is scheduled to return to court later this month for an update on the investigation’s progress.

Fake apps used to impersonate legitimate firms in a larger investment scam

This scam is directly associated with a broader unlicensed collective investment scheme being carried out in violation of Kenya’s Capital Markets Act. The scam has been investigated following complaints from Kestrel Capital (EA) Ltd about a suspect mobile application, KCLNL, available on the Google Play Store and Apple App Store. 

The app claims to be an artificial intelligence investment portfolio offered through the joint ventures of Kestrel Capital and Nathaniel Capital Partners Limited, both of which deny any association with the app. As of now, the app is no longer available on the Google Store.

The victims were enticed through WhatsApp chat groups with promises of up to 7% daily profits. Investors were instructed to transfer money into several bank accounts and other payment methods.

Additionally, the DCI found another application, called GSIWEA, during the investigation.

According to Nyakango, in one of his video messages, he only works as a Binance P2P trader and did not play any role in developing the fake apps.

Binance helps the Kenyan government fight crypto crime

The arrest was made less than two weeks after Binance restricted access to several P2P accounts in Kenya at the National Police Service’s request. As per the hashtag #BinanceUnmasked, users whose accounts were frozen expressed frustration, underscoring the increased cooperation between the platform and the Kenyan government. 

As reported by Cryptopolitan, Binance has stated that its measures are consistent with both local regulations and international laws. To that end, Binance took to X, on a Space Live, to address Kenyans on what had transpired.

The Kenyan government has taken steps to protect its citizens from digital financial scams. In mid-April 2026, the government issued new regulations requiring virtual asset service providers to be more closely regulated. This followed rising fears of fraud stemming from Kenya’s relatively high penetration of mobile money and cryptocurrency services.

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