Kenya Compliance Report

Generated 2026-09-22

Comprehensive Framework

Regulatory Overview

Regulatory Status: Dedicated crypto/VA legislation, licensing regime, active enforcement
Key Regulator(s): Central Bank of Kenya and the Capital Markets Authority, Central Bank of Kenya Act, Communications Authority of Kenya, Implementation of the United Nations Security Council, European Commission
Primary Legislation: Virtual Asset Service Providers Bill 2025: https://www.afriwise.com/blog/kenya-n, The Cabinet Secretary responsible for the National Treasury makes regulations un, The Capital Markets Authority administers the Capital Markets Act and, since the, Kenya has no specific, standalone statute governing cryptocurrencies or digital, Kenya participates in the African Growth and Opportunity Act (AGOA) and the Afri, Under current law, there is no specific license category for cryptocurrency exch, The Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) imposes general AM, Beneficial ownership reporting obligations exist under the Companies Act and POC, The Kenya Finance Act 2023 introduced a 3% tax on the transfer or exchange of di, VAT treatment of crypto transactions is not defined in tax law as applied to dig, The most significant gap is the absence of a comprehensive national law defining, The tax regime, if applied through general income tax law without specific digit
Travel Rule: Adopted — Threshold: Implemented

Key Facts

aml Virtual asset service providers in Kenya are not yet subject to a dedicated licensing or registration regime under the AML/CFT framework as of 2025–2026, though the country has initiated regulatory reforms following its FATF grey listing and EU high-risk designation. Kenya’s Anti-Money Laundering (AML) Amendment Act 2025 and EU’s high-risk listing The Central Bank of Kenya (CBK) is the primary supervisor for AML/CFT compliance across financial institutions including banks, money remittance providers, foreign exchange bureaus, digital credit providers, and payments service providers, but it does not currently license or regulate virtual asset platforms. AML/CFT/CPF | CBK Kenya was placed on the FATF grey list and added to the EU's high-risk third-country list in June 2025, triggering accelerated legislative and supervisory reforms to address strategic deficiencies identified in its 2022 mutual evaluation. Kenya’s Anti-Money Laundering (AML) Amendment Act 2025 and EU’s high-risk listing The practical reality is that no dedicated virtual asset licensing regime has been operationalized for crypto businesses, and such entities would need to seek classification under existing financial institution categories (such as money remittance or payments service provider) if they engage in regulated activities, leaving a significant compliance gap for the crypto sector. AML/CFT/CPF | CBK Kenya's primary AML/CFT legislative framework consists of four main instruments: the Proceeds of Crime and Anti Money Laundering Act, 2009 (POCAMLA); the Proceeds of Crime and Anti Money Laundering Regulations, 2013; the Prevention of Terrorism Act, 2012 (POTA); and the Prevention of Terrorism (Implementation of the United Nations Security Council Resolutions on Suppression of Terrorism) Regulations, 2013. AML/CFT/CPF | CBK Under section 33(4) of the Banking Act, the Central Bank of Kenya has issued a specific Guideline on Anti-Money Laundering and Combating the Financing of Terrorism, which applies to institutions under its supervisory mandate. AML/CFT/CPF | CBK Kenya is committed to implementing international standards set by the Financial Action Task Force (FATF), the global money laundering, terrorism, and proliferation financing watchdog. AML/CFT/CPF | CBK Kenya underwent a Mutual Evaluation by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which published the Mutual Evaluation Report of Kenya in September 2022 on November 9, 2022, assessing Kenya's compliance with global AML/CFT standards. AML/CFT/CPF | CBK
enforcement Regulator name: Office of the Data Protection Commissioner (ODPC); High Court of Kenya; Ministry of Interior and National Administration. The Office of the Data Protection Commissioner issued suo motu determination ODPC/COMP/1394/2023 on 6 September 2023 against Worldcoin Foundation, Tools for Humanity and Tools for Humanity GmbH over biometric iris data collected in Kenya; the general penalty in section 73 of the Data Protection Act, No. 24 of 2019 is a fine not exceeding three million shillings or imprisonment not exceeding ten years or both, while the Data Commissioner's administrative penalty notice under sections 62 and 63 is capped at five million shillings or one per cent of an undertaking's preceding annual turnover, whichever is lower. Date: Operations halted in 2023; registration revoked and full activities banned recently (post-2023, exact date unspecified). Outcome: High Court restraining order issued pending judicial review; ODPC revoked Tools for Humanity's data processor registration; all Worldcoin activities banned in Kenya for one year. Source URL: https://iapp.org/news/a/worldcoin-case-a-watershed-moment-for-data-protection-in-kenya Regulator name: Central Bank of Kenya (CBK); upheld by courts under National Payments Systems Act (NPSA) and money remittance regulations. Entity targeted: Bitpesa (operating through Lipsha Consortium Limited). Violation type: Operating money remittance business via Bitcoin without CBK authorization; AML/KYC non-compliance due to cryptocurrency anonymity. Penalty amount: None specified (service termination, not direct fine). Date: Pre-2023 court case (Lipisha Consortium Limited & another v Safaricom Limited), but relevant to ongoing CBK enforcement precedent.
general Freeman Law on Kenya crypto laws: https://freemanlaw.com/cryptocurrency/kenya/ Spencer West on virtual asset framework: https://www.spencer-west.com/news/from-regulation-to-opportunity-kenyas-virtual-asset-framework-through-a-capital-markets-lens/ Baker McKenzie on regulation evolution: https://blockchain.bakermckenzie.com/2025/01/14/the-evolution-of-cryptocurrency-regulation-in-kenya-from-opposition-to-legalization/ The exact effective date for Travel Rule implementation in Kenya Specific threshold amounts for transaction reporting Which VASPs are covered or how they are defined under Kenyan law Technical implementation requirements specific to Kenya Penalties for non-compliance with Travel Rule requirements
licensing Virtual asset service providers licensed in Kenya must perform customer due diligence before onboarding a client under regulation 32 of the Virtual Asset Service Providers Regulations, 2026, carried out in accordance with the Proceeds of Crime and Anti-Money Laundering Act, and the Second Schedule to the Virtual Asset Service Providers Act, 2025 makes every virtual asset service provider a reporting institution under that Act. The Second Schedule to Kenya's Virtual Asset Service Providers Act, 2025 amends the Proceeds of Crime and Anti-Money Laundering Act so that the definition of reporting institution expressly includes a virtual asset service provider, which places Kenyan virtual asset service providers under the suspicious transaction reporting duty owed to the Financial Reporting Centre with effect from the Act's commencement on 4 November 2025. Kenyan virtual asset service providers must keep a record of both client and own transactions for not less than seven years from the date of the transaction under section 44(2) of the Virtual Asset Service Providers Act, 2025, repeated at regulations 22(1)(b) and 26(3) of Legal Notice No. 134 of 2026, and must give the regulator online read-only real-time access to those records under section 44(1). Kenya's financial intelligence unit is the Financial Reporting Centre, established under the Proceeds of Crime and Anti-Money Laundering Act, which receives and analyses suspicious transaction reports; AML/CFT/CPF supervision and enforcement for virtual asset service providers is carried out by the Central Bank of Kenya and the Capital Markets Authority under section 32 of the Virtual Asset Service Providers Act, 2025. The Capital Markets Authority licenses and supervises virtual asset exchanges, virtual asset brokers, virtual asset investment advisers, virtual asset managers, virtual asset offering providers conducting initial coin offerings, tokenisation providers and token issuance platforms under the First Schedule to the Virtual Asset Service Providers Act, 2025, and section 11(3)(fb) of the Capital Markets Act now requires it to regulate virtual asset service providers. The Central Bank of Kenya licenses virtual asset wallet providers, virtual asset payment processors and stablecoin issuance under the First Schedule to the Virtual Asset Service Providers Act, 2025, and section 4A(1)(dc) of the Central Bank of Kenya Act now empowers it to license and supervise virtual asset service providers; virtual asset exchanges are licensed by the Capital Markets Authority and fall outside the Central Bank's perimeter. Virtual Asset Service Providers Bill 2025: https://www.afriwise.com/blog/kenya-now-has-a-crypto-law-virtual-asset-service-providers-vasp-bill-2025 Draft National Policy on VAs and VASPs: https://newsite.treasury.go.ke/sites/default/files/Notices/DRAFT-NATIONAL-POLICY-ON-VAs-AND-VASPs.pdf
securities Kenya's regulatory framework for cryptocurrencies and digital assets is evolving, with the Capital Markets Authority (CMA) playing a central role in overseeing market participants and ensuring compliance with securities regulations. Capital Markets Authority Licensing procedures require entities to meet stringent criteria, including financial stability and adherence to anti-money laundering (AML) and know your customer (KYC) protocols. Licensing Procedures | CBK Enforcement actions have been limited but are expected to increase as the regulatory landscape matures. Regulating Kenya's Securities Markets Tax treatment of digital assets remains ambiguous, necessitating clear guidelines from the Kenya Revenue Authority (KRA). FINANCIAL REGULATION AND DEVELOPMENT IN KENYA Key gaps include the lack of specific regulations for initial coin offerings (ICOs) and a need for robust investor protection mechanisms. Regulations on the public offer of securities and listings ... The Securities Act, 2012, and the Capital Markets (Licensing Requirements) Regulations, 2015, form the backbone of securities regulation in Kenya. The Capital Market (Licensing Requirements) Regulations The Central Bank of Kenya (CBK) issues guidelines on electronic money and payment systems, indirectly affecting digital asset markets. Mobile and Online Trading Entities seeking to operate in the capital market must obtain a securities exchange license from the CMA, demonstrating compliance with financial soundness criteria. Securities Exchange License
stablecoin A person issuing stablecoin in or from Kenya must be licensed by the Central Bank of Kenya, which the First Schedule to the Virtual Asset Service Providers Act, 2025 makes the regulatory authority for stablecoin issuance; regulation 4 of Legal Notice No. 134 of 2026 applies the Regulations to any person who actively solicits or targets Kenyan consumers, and regulation 70 forbids offering a stablecoin to the public without a licence, issuer status and Central Bank approval of the published white paper. The KES 500 million minimum paid-up capital for stablecoin issuers appeared only in the March 2026 draft Virtual Asset Service Providers Regulations; the figure carried into Legal Notice No. 134 of 2026 on 22 July 2026 is KES 300 million, set in the Fifth Schedule under Part IX of those Regulations. The gazetted Virtual Asset Service Providers Regulations, 2026 require a stablecoin issuer to hold minimum liquid capital of KES 60 million or 100 per cent of current liabilities for at least thirty days, whichever is higher; the KES 100 million figure belongs to the superseded March 2026 draft. Fees under the Virtual Asset Service Providers Regulations, 2026 are set in the First Schedule and payable under regulation 5; the gazetted virtual asset exchange licence fee is KES 1 million with a KES 100,000 application fee and the virtual asset investment adviser pays KES 50,000 with a KES 10,000 application fee, the KES 2 million exchange figure having appeared only in the March 2026 draft. Ongoing monitoring requires regular reports, audits, and compliance standards. Kenya's Virtual Asset Service Providers Regulations, 2026 require the value of a stablecoin issuer's reserve assets to be at all times at least equal to the nominal value of all outstanding units, restrict reserve composition to cash, government securities with residual maturity of ninety days or less and repurchase agreements of seven days or less, and require the reserve assets to be held in custody by a custodian approved by the Central Bank of Kenya; at least 30 per cent of funds received must be held in segregated accounts at commercial banks in Kenya. Regulation 68(1)(h) to (j) of Legal Notice No. 134 of 2026 requires a stablecoin white paper to disclose the method and all factors used to calculate the value of reserve assets, their initial value and composition, and the conditions and procedure to purchase and redeem stablecoins against reserve assets, and regulation 69(2)(c) requires the issuer to publish any event likely to have a significant impact on the value of the stablecoin or of the reserve assets. Regulation 71 of Legal Notice No. 134 of 2026 gives a stablecoin holder a claim against the issuer, requires issuance at par value on receipt of funds and requires the issuer to effect any redemption request within two working days at par value by paying the monetary value of the stablecoin to the holder, while regulation 72 forbids the issuer or any licensee from granting interest to stablecoin holders.
status Kenya has no specific, standalone statute governing cryptocurrencies or digital assets; the current framework relies on general financial laws, capital markets authority guidance, and tax administration measures rather than a bespoke crypto law. Kenya - Customs Regulations The Capital Markets Authority (CMA) is the primary regulator that has issued framework guidance on virtual assets and virtual asset service providers (VASPs), positioning itself to license and oversee digital asset activities under existing capital markets law. Kenya - Customs Regulations No entity has yet received a formal, specific crypto license from CMA under a dedicated digital asset regime; the practical status is that crypto businesses operate in a legal gray zone, with the government sending mixed signals ranging from warnings to tax enforcement. Kenya - Customs Regulations The practical reality is that crypto is not illegal, but it is not explicitly legalized either; businesses face uncertainty, while tax authorities treat crypto gains as taxable income under general tax principles. Kenya - Customs Regulations The primary regulatory authority for financial markets is the Capital Markets Authority (CMA), which operates under the Capital Markets Act (Cap 485A) and has issued public guidance on virtual assets and VASPs, signaling its intent to regulate the space. Kenya - Customs Regulations The Kenya Revenue Authority (KRA) is the tax administration body, with its Customs Services Department (CSD) responsible for collecting import duty and VAT on imports, as well as other levies including the Import Declaration Fee, Petroleum Development Levy, Sugar Levy, Road Maintenance Levy, Road Transit Toll, and various aviation-related fees. Kenya - Customs Regulations CSD operates under KRA at Times Tower, 12th Floor, P.O. Box 40160 – 00100 GPO Nairobi, Kenya, with Commissioner for Customs & Border Control Ms. Lillian Nyawanda as the key contact. Kenya - Customs Regulations The CSD is a member of the World Customs Organization (WCO), and Kenya is a member of the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), which entails preferential tariff treatment subject to Rules of Origin. Kenya - Customs Regulations
travel rule Kenya does not have a comprehensive, crypto-specific statute governing virtual assets as of 2025–2026; the Central Bank of Kenya (CBK) has repeatedly warned that cryptocurrencies are not legal tender and has issued public advisories against their use (CBK/PG/08/2015, CBK/PG/14/2021, CBK/PG/03/2023), but no licensing regime for crypto service providers is operational under Kenya’s primary financial laws (Banking Act Cap 488, National Payment System Act 2011). Kenya Travel Advisory The Capital Markets Authority (CMA) published the Draft Capital Markets (Virtual Asset Service Providers) Regulations, 2023 (Kenya Gazette Supplement No. 215, Legislative Supplement No. 127, dated 29 December 2023), but as of the current research window, no final, gazetted regulations establishing a licensing framework for crypto exchanges or wallet providers have been enacted, and no entity has been granted a crypto-specific license by CMA. Kenya Travel Advisory The Financial Reporting Centre (FRC) — Kenya’s Financial Intelligence Unit — issued Guidance Note FRC/VASP/001/2023 classifying VASPs as “reporting institutions” under the Second Schedule of POCAMLA 2009, obligating them to comply with AML/CFT obligations including customer due diligence and suspicious transaction reporting; however, the travel rule requirement (sharing originator/beneficiary information between VASPs) has not been explicitly operationalized in Kenyan law. Arrival Procedures and the Responsibility of Travelers' on Arrival Despite regulatory uncertainty, peer-to-peer crypto trading and informal digital asset activity is widespread in Kenya (Chainalysis 2023 Global Crypto Adoption Index: Kenya ranked 21st globally), but formal onboarding to licensed crypto platforms remains blocked by the absence of a legal licensing pathway, creating significant compliance and legal risk for businesses. Smartraveller See International AML Standing subsection under Regulatory Framework for Kenya’s FATF/ESAAMLG status and grey-list implications. Incorporated in Kenya as a limited liability company (Companies Act 2015). Physical registered office in Kenya. At least one director who is a Kenyan citizen.

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-09-22. View full profile