Kenya’s crypto law ushers in a new chapter for digital finance. On Tuesday, Parliament passed the Virtual Asset Service Providers Bill 2025, which requires all crypto exchanges and service providers to comply or face exclusion from the market.
The Bill, officially cited as National Assembly Bill No. 15 of 2025, represents the country’s approach toward bringing structure, accountability, and investor protection to the crypto economy.
Kenya has been one of Africa’s top crypto markets by adoption for years, but without a clear legal framework, the industry operated in a regulatory grey zone.
“The Bill establishes a comprehensive legal and regulatory framework for the operation of Virtual Asset Service Providers (VASPs) in Kenya,” Parliament said in an official statement. “It seeks to promote innovation in digital finance while safeguarding consumers and maintaining the integrity of the financial system.”
Kenya crypto law makes exchange compliance mandatory
Any person or company—local or foreign—providing crypto-related services such as exchange operations, wallet hosting, or custodial management must obtain a license from a designated regulatory authority.
These authorities may include the Capital Markets Authority (CMA), the Central Bank of Kenya (CBK), or a newly proposed Virtual Assets Regulatory Authority created to oversee the sector.
This effectively shuts the door on unregistered or loosely structured exchanges that once thrived in Kenya’s fintech sector. Only companies limited by shares registered under the Companies Act are eligible to apply.
The Bill introduces several mechanisms to safeguard user funds, a response to years of unregulated trading platforms collapsing or vanishing with investors’ assets.
According to Parliament’s statement, Part IV of the Bill “mandates VASPs to maintain adequate safeguards for client assets, obtain appropriate insurance cover, and maintain bank accounts in Kenya to enable effective monitoring and oversight.”
Exchanges will now be required to separate client assets from company funds, disclose risks clearly, and implement internal policies to manage conflicts of interest.
They must also maintain detailed operational records to enhance transparency and traceability across the sector.
Additionally, under Part V, the Bill strengthens enforcement by granting regulatory bodies authority to inspect, supervise, and impose penalties for non-compliance.
The law also provides for inter-agency collaboration to promote financial stability and combat illicit financial flows, including money laundering and terrorism financing.
“The Bill strengthens the enforcement capacity of regulatory bodies by granting them powers to supervise, inspect, and impose penalties for non-compliance,” Parliament explained. “It also allows for collaboration between regulators and other competent authorities to promote financial stability and international cooperation.”
This aligns Kenya with international standards set by bodies like the Financial Action Task Force (FATF). The Bill expands existing frameworks to include anti-money laundering (AML), countering the financing of terrorism (CFT), and countering proliferation financing (CPF) obligations—collectively known as AML/CFT/CPF obligations.
Clarity for the crypto ecosystem
Another notable provision is how the Bill defines a “virtual asset.” It clarifies that virtual service tokens, such as loyalty or access tokens used within digital platforms, are not considered virtual assets under the Act.
Companies that use blockchain purely for utility or internal transactions won’t be forced into the same regulatory framework as crypto exchanges or token issuers.
However, for global exchanges like Binance, Luno, or Yellow Card that serve Kenyan users, this law will require deeper engagement with local authorities and strict adherence to local financial standards.
Smaller homegrown startups may face a more challenging road, as meeting compliance costs and local banking requirements could prove difficult.
Still, by establishing clear rules, Kenya could attract institutional investors, fintech partnerships, and global crypto service providers seeking a compliant base in East Africa.
Once enacted, Parliament stated that the Bill will “create a transparent and secure environment for digital financial activities, safeguard public interest, and attract investment in Kenya’s fast-evolving fintech landscape.”