Crypto users in Kenya to face stricter regulations with new bill
The measure aligns with Kenya’s broader strategy to get delisted from the FATF grey list.
Kenya.- The Kenyan parliament is considering legislation that seeks to differentiate between legitimate cryptocurrency users and those involved in illicit activities like tax evasion, cheating and hacking.
The proposal, Virtual Assets Service Providers Bill 2025, was introduced by Kimani Ichungwa, the parliament’s majority leader. It aims to adopt a legislative framework to license and regulate virtual asset service providers (VASPs).
The bill aims to stop anonymous services in virtual assets, bringing Kenya in line with global standards to combat money laundering and cybersecurity threats. It advocates for complete transparency in transaction details, including the identities of all parties involved, to ensure accountability and facilitate tracking.
Amendments to 2024 Bill
The new measure updates the Virtual Assets Service Provider’s Bill 2024, which the cabinet secretary for national treasury and economic planning unveiled in January 2025 with key amendments.
The 2024 Bill imposed a penalty of Ksh 150,000 (€1,050), plus an additional Ksh 15,000 (€105) for each day or part thereof, on licensees who failed to grant the regulatory authority online, real-time, read-only access to client and proprietary virtual asset transaction records.
However, under the new proposal, non-compliance with licence display and other regulatory requirements may attract fines of up to Ksh 3 million (€21,000) for individuals and Ksh 10 million (€70,000) for companies.
Unlike the 2024 bill, which overlaps the oversight of VASPs between the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA), the 2025 measure clarifies their roles. While the central bank will oversee wallets, the CMA will regulate investments and exchanges.
A new provision was also added to enable token issuance platforms to facilitate the issuance and trading of tokens representing tangible assets.
The bill also brings stablecoins and initial coin offerings under the regulatory oversight of the Central Bank of Kenya and the Capital Markets Authority, respectively.
Exiting the Grey List
The new bill aligns with Kenya’s broader strategy to strengthen its anti-money laundering and counterterrorism financing framework and ultimately get delisted from the FATF grey list.
In February 2024, Kenya was added to the Financial Action Task Force’s (FATF) grey list due to inadequacies with its anti-money laundering regimes. The greylisting has led to reduced foreign direct investment and constraints on correspondent banking for the country.
