Luno, a UK-based crypto company, has made a triumphant return to Kenya after exiting the market in 2014. With established operations in South Africa, Nigeria, and Uganda, Luno now sets its sight on the East African country, marking its fourth venture in Africa. The journey of Luno, previously known as BitX, in Kenya dates back to 2013 when it entered the market as one of the pioneering startups offering cryptocurrency trading services. However, regulatory uncertainties forced the company to withdraw in 2014.
Fast forward to the present day, Kenya has evolved into East Africa’s most vibrant cryptocurrency market, driven by the widespread adoption of mobile money platforms like M-Pesa and the increasing penetration of smartphones among the youth. This transformation has created a favorable environment for crypto companies like Luno to re-enter and thrive. The regulatory landscape in Kenya has also shown signs of progress with the introduction of the Virtual Asset Service Providers (VASP) Bill, signaling a shift towards formal licensing and oversight by regulatory bodies.
Despite the changing tides, the re-entry into Kenya poses challenges for Luno as the market now brims with formidable competitors such as Binance, Huobi, and OKX, who have established a strong presence. Apollo Sande, Luno’s country manager for Kenya and Uganda, sheds light on the strategic decision to return to Kenya, emphasizing the importance of regulatory clarity and the company’s commitment to compliance and trust-building in the market.
The past structural risks, particularly the banking ban in 2014, presented hurdles for crypto players in Kenya, leading to the rise of peer-to-peer (P2P) payment rails with inherent risks for users. However, with the impending regulations and a more favorable tax code, the industry is poised for sustainable growth. The proposed 10% excise duty on crypto transactions, if implemented, is expected to streamline taxation and enhance the industry’s sustainability.
Luno’s approach to navigating the regulatory landscape and adapting to market dynamics involves close engagement with regulators, monitoring transactions rigorously to meet Anti-Money Laundering (AML) standards, and ensuring compliance with regulatory requirements like the travel rule. The company’s commitment to transparency and security is underscored by its robust transaction monitoring tools and risk management framework.
As Luno prepares to launch its full range of services in Kenya, including wallet services, instant buy/sell options, and a live exchange, the focus remains on providing a secure, user-friendly platform that caters to the growing demand for safe and transparent crypto services. The company’s stance on listing coins, enabling local stablecoins, and aligning with market needs reflects its adaptive strategy to meet evolving customer preferences and regulatory developments.
Looking ahead, Luno’s immediate goal in Kenya is to establish itself as a trusted and reliable crypto exchange, filling the gap left by P2P platforms and offering a superior customer experience. With a solid foundation built on years of secure operations and a customer-centric approach, Luno aims to drive growth and innovation in Kenya’s dynamic crypto market.
In conclusion, Luno’s re-entry into Kenya symbolizes a strategic move to tap into the country’s burgeoning crypto market while navigating regulatory complexities and fierce competition. By prioritizing compliance, transparency, and user safety, Luno aims to carve a niche for itself in Kenya’s evolving crypto landscape, setting the stage for sustainable growth and industry leadership.
