Kenya Moves Closer To Crypto Law With VASP Draft Review

• Kenya reviews VASP draft rules, introducing licensing, capital, and compliance requirements for crypto firms.
• Regulations enforce consumer protection, asset segregation, and strict market conduct standards.
• Multi-agency oversight by CBK, CMA, and Treasury aims to strengthen supervision and enforcement.

Kenya has moved a step closer to regulating virtual assets after concluding public participation on the 2026 VASP Regulations, according to Kenya National Treasury. The process follows the 2025 VASP Act and outlines licensing, compliance, and oversight measures. Authorities now shift to reviewing submissions before finalizing rules aimed at managing crypto activity and protecting users.

Framework Sets Licensing and Compliance Rules

The draft regulations establish a legal structure for virtual asset businesses operating in Kenya. These include cryptocurrencies, tokenized assets, and stablecoins. According to the Kenya National Treasury, the framework introduces licensing requirements and strict operational standards.

Notably, firms must meet capital thresholds and ownership suitability checks. They must also implement governance systems and risk management controls. In addition, anti-money laundering and counter-terrorism financing measures form a core requirement.

This structure connects directly to broader oversight. Regulators aim to ensure consistent supervision across all licensed entities operating within or from Kenya.

Consumer Protection and Market Integrity Measures

Beyond licensing, the draft outlines specific consumer protection rules. Service providers must disclose risks clearly and maintain transparent pricing models. They must also establish complaint handling systems.

However, asset protection remains a central focus. Firms must separate customer funds from operational accounts. This reduces misuse risks and improves accountability.

Meanwhile, the framework enforces market conduct rules. Authorities require due diligence before listing assets and continuous monitoring of trading activity. Manipulation, insider trading, and false trading face strict prohibition.

Coordinated Oversight and Next Steps

To support enforcement, Kenya adopts a multi-agency approach. The Central Bank of Kenya, Capital Markets Authority, and the Treasury will oversee implementation jointly. This coordination aims to strengthen supervision and regulatory consistency.

Moreover, the draft introduces ongoing reporting and cybersecurity requirements. Firms must conduct audits and maintain insurance coverage. These measures address operational risks and system resilience.

Following the consultation phase, authorities will consolidate stakeholder feedback. The review process will determine final provisions before the regulations take effect.

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