Kenya has introduced a landmark regulatory framework for cryptocurrency businesses by assigning oversight responsibilities to the Capital Markets Authority (CMA). This move follows the enactment of the Virtual Assets Service Providers (VASP) Act, 2025, which establishes licensing and regulatory requirements for crypto exchanges, brokers, investment advisers, managers, and offering providers.

The CMA’s 2025 Annual Supervision Report highlights that this legislation marks a significant shift, bringing Kenya’s previously unregulated virtual asset sector under formal supervision. The law aims to enhance investor protection and ensure compliance with international anti-money laundering and counter-terrorism financing standards, notably aligning with the Financial Action Task Force’s Recommendation 15.

Key Regulatory Developments

  • The CMA now regulates all virtual asset service providers, expanding its mandate beyond traditional capital markets.
  • Collaborative efforts between the National Treasury, CMA, and Central Bank of Kenya (CBK) are underway to draft detailed licensing and supervisory regulations for crypto businesses.
  • New licensing frameworks also address other emerging financial services, including over-the-counter trading platforms and AI-driven investment advisory services.

These reforms position Kenya among the forefront of African nations formalizing digital asset oversight, balancing innovation with risk mitigation related to fraud, money laundering, and terrorist financing.

Broader Financial Market Integration

Alongside the crypto regulations, the CMA has enhanced its role in cross-border regulatory cooperation. In 2025, Kenya became the second African regulator to join the International Organization of Securities Commissions’ Enhanced Multilateral Memorandum of Understanding (EMMoU), facilitating improved information sharing and enforcement collaboration globally.

Kenya’s growing fintech ecosystem and widespread mobile money adoption have fueled retail interest in cryptocurrencies, making these regulatory updates crucial for sustainable market development and investor confidence.

The effectiveness of the new crypto oversight will hinge on forthcoming implementing regulations by the Treasury, CMA, and CBK. These will define licensing criteria, supervision protocols, and monitoring mechanisms to ensure Kenya’s digital asset sector meets international regulatory expectations.