Kenya is set to usher in new laws for digital assets regulations with the introduction of the Virtual Asset Service Providers (VASP) Bill, 2025.
The legislation, which has been tabled by the country’s treasury, is designed to bring comprehensive oversight to the country’s growing cryptocurrency ecosystem.
The bill aims to establish a clear and enforceable legal framework for companies operating within the virtual asset space, specifically targeting cryptocurrency exchanges, custodial wallet providers, token issuers, and related intermediaries.
The legislation comes at a critical time when Kenya’s digital asset market continues to expand rapidly. The sector has an estimated annual value of KSh2.4 trillion, equivalent to nearly 20% of the country’s GDP.
One of the most notable provisions of the Bill is the prohibition of “mixer” and “tumbler” services technologies designed to make the origins and destinations of cryptocurrency transactions anonymous. These anonymizing tools have been linked to high-profile cases of money laundering and other illicit financial flows, raising red flags among global financial regulators.
Under the proposed law, individuals found operating or using such services could face fines of up to $23,174.97 (KSh3 million), while corporate offenders could be liable for penalties reaching $77,249.90 (KSh10 million), in allongside to possible imprisonment.
The legislation also mandates that all virtual asset service providers be licensed by either the Capital Markets Authority (CMA) or the Central Bank of Kenya (CBK), depending on their function. The CBK oversees custodial wallet providers and crypto payment processors, while the CMA IS responsible for licensing and supervising exchanges, token issuers, brokers, and investment advisers dealing in virtual assets.
Additionally, all licensed virtual asset service providers will be required to maintain a physical office in Kenya and a minimum board of three natural-person directors, ensuring local oversight and accountability. All providers must also offer real-time, read-only access to transaction data to regulators, dramatically reducing the veil of user anonymity.
Reports also indicate that discussions are ongoing between the government and the Kenya Revenue Authority (KRA) regarding potential integration with crypto platforms to enhance tax compliance and monitoring.
Speaking during a press event in Nairobi recently, Rachel Conlan, the Global Chief Marketing Officer at Binance, the crypto exchange, shared the company’s vision and strategy for deepening its regulatory engagement in the Kenyan market.
She expressed optimism about the progressive steps being taken by global and local regulators. “We’re excited that regulatory clarity being set by Europe, being set by the U.S., already being taken seriously by Kenya is something that’s going to help us grow the industry more and create more economic opportunity,” Conlan said. This clarity, she argued, is essential for fostering innovation and investment and also for ensuring the protection of users and the integrity of the financial system.
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