Kenya’s Treasury has introduced the Virtual Asset Service Providers Bill, 2025, which seems to regulate cryptocurrency exchanges, custodial wallet providers, and token issuers.
The Bill is aimed to forbid the use of features like “mixer” or “tumbler” services designed to hide identity of virtual asset transactions-technologies frequently used to launder illicit funds.
If this Bill succeeds into a law, each defaulters will face fines of up to Sh3 million while businesses will be fined Sh10 million, as well as possible imprisonment.
Depending on their function, all virtual asset service providers will be required to get licensed by either the Capital Markets Authority or the Central Bank of Kenya. The Bill also stipulates that CBK will be mandated to control custodial wallet
providers and payment processors. However, the CMA will regulate exchanges, token issuers, brokers, and investment advisers.
Additional requirements include having a physical office in Kenya and a board of at least three natural-person directors to ensure local oversight and accountability.
All providers must also provide regulators with real-time, read-only access to transaction data, significantly reducing user anonymity.
Although not explicitly stated in the Bill, discussions are reportedly underway for the Kenya Revenue Authority to integrate with cryptocurrency platforms for tax monitoring, coinciding with the country’s grey listing by the Financial Action Task Force in February 2024 for anti-money laundering deficiencies.
With Kenya’s crypto market estimated at Sh2.4 trillion per year, or nearly 20% of GDP, the Bill represents a significant shift from loosely regulated innovation to institutional-grade compliance.
For ordinary Kenyans who use cryptocurrency for remittances, savings, and cross-border transactions, this represents a move toward financial system integration and stronger consumer protections.
