Who Really Controls Your Crypto Assets?

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In cryptocurrency, ownership is not defined by whose name appears on an account, but by who holds the private keys.

The commonly used phrase “not your keys, not your crypto” means that real control over your digital assets such as Bitcoin, Ethereum, or Stablecoins, belongs to the person or platform that controls the private keys linked to those assets.

In Kenya, where crypto use has expanded for remittances, trading, and protection against inflation, this distinction has become more important as fraud cases rise and regulation takes shape.

For most users, access to crypto begins with custodial platforms. These are exchanges and apps where a company holds and manages crypto on behalf of users. Popular examples used by Kenyans include Binance, which is widely used for peer-to-peer trading with M-Pesa, as well as Coinbase, OKX, Busha, and Yellow Card.

On these platforms, users deposit money, buy or sell crypto, and often leave their assets stored in the exchange’s wallet. While the account belongs to the user, the private keys do not. This means the platform controls your crypto assets and ultimately decides whether transactions can be processed.

Custodial platforms are popular because they are easy to use. They offer customer support, password recovery, and direct links to mobile money and bank services. For beginners, this setup feels similar to online banking.

The downside is risk. If an exchange is hacked, collapses financially, or is ordered by regulators to freeze accounts, users may lose access to their funds. Global cases such as the collapse of FTX showed that even large platforms can fail, leaving customers unable to recover their crypto.

These risks are not theoretical in Kenya. In 2024, Kenyans lost more than Sh5.6 billion ($43 million) to crypto-related fraud, a 73 percent increase compared to 2023. The rise in losses led to the creation of a specialised Directorate of Criminal Investigations unit to deal with crypto scams.

Many fraud cases start on social media, where scammers pose as exchanges, traders, or influencers, directing users to fake platforms or promising guaranteed returns. Once funds are sent, recovery is usually impossible.

An alternative approach is self-custody. This means storing crypto in a wallet where only the user controls the private keys. Common non-custodial wallets used in Kenya include Trust Wallet, MetaMask, and Exodus, while hardware wallets such as the Ledger Nano X store keys offline.

When setting up these wallets, users receive a seed phrase, which is a list of words that acts as a master key. As long as the user keeps this phrase safe, no third party can access, freeze, or lose the assets. In simple terms, self-custody means you control your crypto assets directly.

Self-custody removes the risk of exchange failure but introduces personal responsibility. If the seed phrase is lost, forgotten, or shared with a scammer, the assets are gone permanently. There is no customer service or password reset. This model works best for users who understand basic security practices and are willing to manage their own backups.

Kenya’s regulatory framework now recognises these differences. The Virtual Asset Service Providers (VASP) Act, passed in October 2025, requires exchanges and other custodial services to be licensed and supervised by the Central Bank of Kenya and the Capital Markets Authority.

The law focuses on platforms that hold customer funds and aims to reduce fraud and misuse. It does not regulate self-custody wallets or the blockchain networks themselves. Even with licensed providers, users still face counterparty risk because the platform controls the private keys.

Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.