Crypto trader Dickson Ndege Nyakango was detained for seven days by the Milimani Law Courts in Nairobi as detectives continue investigations into an alleged cryptocurrency investment fraud involving more than Sh58 million.
The Directorate of Criminal Investigations (DCI), through the Capital Markets Fraud Investigation Unit, told the court Monday that Nyakango is a key suspect in an alleged scheme involving the operation of an unlicensed collective investment platform, contrary to the Capital Markets Act and conspiracy to defraud.
According to investigators, the case stems from complaints lodged by Kestrel Capital (EA) Ltd, a licensed stockbroker, which flagged an application listed as KCLNL on Google Play and Apple App Store.
The app allegedly advertised an artificial intelligence-powered investment fund purportedly linked to Kestrel Capital in partnership with a separate entity, Nathaniel Capital Partners Limited.
Detectives told the court that Kestrel Capital has no association with the said entity or the investment platform, raising concerns of impersonation and fraudulent misrepresentation to the public.
The court heard that the scheme allegedly promised unusually high daily returns of up to seven percent, luring unsuspecting investors into joining WhatsApp groups where they were directed to deposit funds through bank accounts, paybill numbers and mobile payment channels.
Preliminary investigations indicate that funds were channelled into multiple bank accounts, including those linked to Nyakango.
One of the accounts is reported to have received approximately Sh33.67 million between April 8 and April 29, 2026.
Investigators further told the court that the suspect was arrested on May 4, 2026, at an I&M Bank branch along Kenyatta Avenue while attempting to withdraw funds from one of the accounts under investigation.
The prosecution argued that the matter is complex, involving numerous victims, multiple bank accounts and digital platforms and requires additional time to record statements, analyse financial trails and identify other possible accomplices.
Detectives also raised concerns that releasing the suspect at this stage could jeopardize investigations, with fears that he may interfere with evidence, access unfrozen accounts, or continue operating related platforms, including another app identified as GSIWEA.
The court was further informed that Nyakango has no known fixed place of residence, increasing the risk of absconding if released.
In granting the custodial order, the court allowed detectives to hold the suspect at Kilimani Police Station for seven days to complete investigations.
The matter will be mentioned later this month to confirm compliance and provide an update on the progress of investigations.
The case highlights fraud and regulatory risk in P2P crypto channels in Kenya, posing reputational pressure on Binance P2P, potentially hurting local crypto adoption and market confidence as enforcement unfolds.
Officials say the crime is new in the country and keeps evolving with authorities rushing to equip personnel with skills to enable them address the same. This is through training locally and internationally.
The US government has been leading in this effort of addressing the menace.
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