CBK warns public against foreign exchange dealers : The Standard

Central Bank has issued warning to Kenyans on mushrooming online foreign exchange dealers and platforms in the country. The regulator on Friday outlined key characteristics of such dealers and platforms warning unsuspecting Kenyans not to fall prey and lose money to the unregulated platforms. “We urge members of the public to confirm the licensing status of forex dealers from CBK website before engaging with the dealers, as they risk being defrauded and losing money,” reads a statement from CBK’s Banking Fraud Investigations Department. In CBK’s list, some of the characteristics of unlicensed dealers and platforms include purporting to offer best forex deals in the market, they collect and or receive funds from customers in exchange for foreign or local currencies and lack of requisite licenses issued by CBK or Capital Markets Authority.

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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. Information from CBK website on licensing of a forex bureau includes the non-refundable application fee of Sh20000 for new license and Sh10,000 for an outlet of an existing forex bureau. Other requirements include a declaration that none of its directors or shareholders has ever been declared bankrupt, participated in the management of the collapsed institution, convicted by any court of competent jurisdiction of a criminal offence involving money laundering, tax evasion or fraud.

The Central Bank within 90 days of the date of application request for additional information and where it is satisfied to issue a letter of intent to the applicant.

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In June, neighbouring country Tanzania 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. The new rules, published by the country’s central bank, come months after the government revoked the licences of around 100 bureaus and temporarily shut a newspaper for using unofficial data on exchange rates. President John Magufuli has said that the central bank had previously licensed too many bureaus and some of them had breached laws.

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Central Bank of KenyaForex tradeJohn Magufuli