CRYPTO CRIME | Kenyan Crypto Trader Arrested While Attempting to Withdraw Fraudulent Funds at I&M Bank

A Kenyan court has ordered the seven-day detention of a man accused of operating a fraudulent cryptocurrency-themed investment platform that allegedly collected about $440,000 from unsuspecting investors, as detectives investigate what they described as a complex digital fraud scheme.

The detention order was granted following an application by the Capital Markets Fraud Investigation Unit of the Directorate of Criminal Investigations (DCI), which told the court the case involves multiple victims, digital money trails and possible accomplices who remain at large.

According to investigators, the probe began after Kestrel Capital flagged a suspicious mobile application listed on Google Play and Apple’s App Store that allegedly marketed itself as an artificial intelligence-powered investment fund linked to Kestrel Capital and Nathaniel Capital Partners Ltd.

Kestrel Capital denied any connection to the platform or the purported partner, prompting concerns over impersonation and fraudulent misrepresentation, court filings showed.

Detectives said the platform promised daily returns of up to 7%, recruited users through WhatsApp groups and instructed victims to deposit funds through

• bank accounts,
• Paybill numbers and
• mobile money channels.

One account linked to the suspect reportedly received about $260,200 between April 8 and April 29 2026.

The suspect, identified as Dickson Ndege Nyakango, was arrested on May 4 2026 at an I&M Bank branch along Nairobi’s Kenyatta Avenue where detectives allege he was attempting to withdraw money from one of the accounts under investigation.

Prosecutors argued that releasing him could compromise ongoing investigations, noting that authorities are still tracing additional accounts and digital platforms, including another app identified as GSIWEA. The court ordered Nyakango detained at Kilimani Police Station for seven days pending further investigations, with the matter expected back in court later this month.

The case comes as Kenya moves to tighten oversight of the digital asset sector following the passage of the Virtual Asset Service Providers Act in October 2025. The law places crypto-related payment services under the supervision of the Central Bank of Kenya and introduces licensing, anti-money laundering and consumer protection requirements for virtual asset service providers.

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