Kenyan authorities approved a bill on virtual asset service providers (VASP), establishing a legal framework for regulating the crypto market. The new law aims to protect consumers, enhance industry transparency, and attract investment into the country’s FinTech sector.
Kenya’s Parliament passed the Virtual Asset Service Providers Bill, which requires all VASPs operating in the country to obtain a license from one of the designated local regulators. Licensing authority is granted to:
- Central Bank of Kenya (CBK);
- Capital Markets Authority (CMA);
- Virtual Assets Regulatory Authority (VARA), a newly established specialized government agency.
Applicants must be registered as limited liability companies, including foreign firms operating in Kenya.
The bill introduces strict standards for anti-money laundering, consumer protection, and cybersecurity. Local crypto service providers are required to:
- keep client assets separate from company funds;
- maintain insurance coverage and accounts in Kenyan banks;
- develop internal policies to prevent conflicts of interest;
- keep detailed records to increase operational transparency and prevent abuse.
The bill also significantly expands the powers of supervisory authorities. Local regulators are now authorized to:
- audit VASP operations;
- conduct inspections;
- impose fines;
- suspend licenses in case of violations.
Moreover, the law allows cooperation with international bodies to combat illicit financial flows. The updated version clarifies definitions and compliance requirements with global anti-money laundering (AML), counter-terrorism financing (CFT), and counter-proliferation financing (CPF) standards.
Notably, the document distinguishes between “virtual assets” and “virtual service tokens.” The latter fall outside the law’s regulatory scope and don’t require licensing if a company’s activities are limited to them.
The bill will officially take effect once signed by President William Ruto, after which Kenya will become one of the few African countries with comprehensive legislation on digital assets. According to Kuria Kimani, Chair of the Finance and National Planning Committee of the National Assembly, most young Kenyans aged 18–35 use virtual assets for investment, payments, and trading — and the new legal framework aims to make this market safer and more transparent.
Kenya ranks among the top five crypto economies in Sub-Saharan Africa by on-chain transaction volume, which totaled around $20 billion between July 2024 and June 2025.
