Kenya arrests suspects over an AI crypto investment scam platform, court orders 7 days of detention

Citing court documents and local media reports, Kenya’s Directorate of Criminal Investigations (DCI) Capital Markets Fraud Investigation Unit arrested suspect Dickson Ndege Nyakango at the I&M Bank branch on Haile Selassie Avenue in Nairobi on May 4.

Arrest action and court remand order

According to the court documents, the DCI detective said Nyakango was arrested on May 4, 2026 while attempting to withdraw funds from a bank account that is under investigation. The DCI told the court that releasing Nyakango would jeopardize an ongoing investigation, including because the case involves complex digital trails, multiple victims, and the possibility that other accomplices may be at large. Investigators also said they are tracking other accounts and digital platforms, including an app called GSIWEA.

Scam method: impersonating Kestrel Capital, 7% daily return, and where funds went

According to the court documents, the investigation began after Kestrel Capital reported to authorities a suspicious activity application listed on Google Play and the Apple App Store. The app claimed it was an AI-driven investment fund associated with Kestrel Capital and Nathaniel Capital Partners Ltd. The DCI detective told the court that Kestrel Capital denied any association with the platform or the so-called partners.

Based on the DCI detective’s statements to the court, the platform’s operations included:

· Promising a daily return of up to 7%

· Recruiting users through WhatsApp groups

· Asking users to deposit funds via bank accounts, Paybill numbers, and mobile payment channels

According to the court documents, a bank account linked to the suspect received approximately $260k in inflows between April 8, 2026 and April 29, 2026.

Status of Kenya’s Virtual Asset Service Providers Act

According to public records from Kenya’s Parliament, in October 2025 Parliament passed the Virtual Asset Service Providers Act, authorizing the Central Bank of Kenya (CBK) to regulate crypto payment services and introducing a licensing regime for exchanges, custodial institutions, and other virtual asset service providers, along with anti-money laundering requirements and consumer protection rules. Draft subsidiary regulations prepared by the national Treasury are still pending issuance via a gazette notice.

FAQ

Why did Kenya’s DCI arrest Dickson Nyakango on May 4, 2026?

Based on court documents, the DCI Capital Markets Fraud Investigation Unit arrested Dickson Ndege Nyakango for allegedly running a fraudulent crypto investment platform. The platform allegedly defrauded about $440k from multiple investors. The DCI detective said he was attempting to withdraw funds from an account under investigation at the time of his arrest.

Which institutions did the scam platform impersonate?

According to the court documents, the platform listed an application on Google Play and the Apple App Store, claiming it was associated with Kestrel Capital and Nathaniel Capital Partners Ltd., and attracting users by presenting itself as an AI-driven investment fund. Kestrel Capital has denied any association with the platform to the DCI.

What are the key contents of Kenya’s Virtual Asset Service Providers Act?

According to public records from Kenya’s Parliament, the law was passed in October 2025. It authorizes the Central Bank of Kenya (CBK) to regulate crypto payment services and introduces licensing requirements and anti-money laundering obligations for relevant operators. Draft subsidiary regulations prepared by the national Treasury are still pending issuance via a gazette notice.