Luno, the UK-based cryptocurrency company with established operations in South Africa, Nigeria, and Uganda, has officially re-entered the Kenyan market. Announced on June 23, this strategic move expands Luno's African footprint, marking its return to East Africa a decade after its initial exit in 2014. Operating previously as BitX since 2013, Luno now aims to provide compliant and accessible services for digital assets such as Bitcoin, Ethereum, and USDT to Kenya's dynamic and tech-savvy population, serving over 15 million global users and holding a crypto license in South Africa.

Luno first established a presence in Kenya in 2013 as one of the pioneering startups offering cryptocurrency trading. However, its operations ceased in 2014 following a Central Bank of Kenya (CBK) circular that prohibited banks from collaborating with crypto exchanges. This regulatory ambiguity forced early players to rely on peer-to-peer (P2P) payment rails for on- and off-ramping, which Apollo Sande, Luno’s Country Manager for Kenya and Uganda, highlighted as posing significant risks to customers, including exposure to bad actors, transaction failures, and a lack of stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.

A decade later, Luno is returning to a radically transformed market. Kenya has emerged as East Africa's most active cryptocurrency hub, driven by the widespread adoption of mobile money platforms like M-Pesa and increasing smartphone penetration. Luno's re-entry, soft-launched in December 2024 and now fully operational, is strategically aligned with the cautious evolution of Kenya's regulatory environment. A new Virtual Asset Service Providers (VASP) Bill is advancing through Parliament, promising a formal licensing framework under the oversight of the CBK and the Capital Markets Authority (CMA). Luno has been actively engaged in discussions with Kenyan authorities for years, observing progress and anticipating a forward-looking regulatory landscape.

Luno is debuting in Kenya with a full suite of services, encompassing a comprehensive order book exchange, instant buy/sell functionality, and secure wallets for storing, sending, and receiving cryptocurrencies. Kenyan users can conduct trades using the local currency (KES) across live pairs such as BTC/KES, ETH/KES, USDT/KES, and USDC/KES, in addition to global trading pairs like BTC/USDT. To navigate the current absence of direct banking integrations for crypto, Luno will introduce voucher payments, a method successfully implemented in Nigeria when similar banking restrictions were imposed on crypto companies.

The company has also addressed the contentious issue of cryptocurrency taxation in Kenya. An earlier 3% tax on the gross value of all crypto transactions, enacted in 2013, proved impractical and was never collected. Following extensive lobbying from the industry, a revised proposal suggests a 10% excise duty on the commissions earned by crypto exchanges, alongside corporate income tax. Luno has affirmed its commitment to bearing this 10% excise duty, integrating it into its fee structure. While this will reduce profit margins, it ensures a smoother customer experience and facilitates tax collection, making the industry's operations more sustainable and compliant.

Despite the evolving regulatory landscape, Luno faces a competitive market dominated by deep-pocketed foreign players like Binance, Huobi, and OKX. However, Apollo Sande believes there is a substantial untapped market beyond the tech-savvy, high-risk individuals who have historically relied on P2P platforms. Luno aims to attract a broader demographic of users who prioritize clarity, transparency, safety, and trust—a gap that centralized exchanges like Luno are well-positioned to fill. The impending VASP Bill is expected to establish clear operational standards, further solidifying the position of compliant players in the market.

Luno emphasizes its robust security framework, boasting no reported security breaches since its inception in 2013. The company also publishes monthly, independently verified Proof of Reserves reports, ensuring customer assets are held 1:1. Operating in approximately 40 countries, Luno adheres to stringent AML, KYC, and counter-proliferation processes, including compliance with FATF guidelines and the travel rule. The company employs dedicated teams and advanced tools like Chainalysis and Elliptic for on-chain monitoring, conducting thorough due diligence, assessing fund sources, and flagging suspicious activities, sanctions, and politically exposed persons (PEPs) within a comprehensive risk management framework.

Luno's re-entry into Kenya is part of its broader mission to enhance the accessibility and fairness of financial services. While Kenya benefits from a full product suite, Luno's operations in Uganda, initiated in 2019, remain crypto-only due to earlier bans on banking and mobile money integrations. Luno hopes that Kenya's regulatory progress will serve as a blueprint for other African nations, potentially enabling the reintroduction of a full product suite in Uganda once regulatory clarity is achieved there. The company remains committed to working alongside regulators and industry partners to foster responsible crypto adoption and shape future licensing frameworks across the continent.