Kenya’s proposed Virtual Assets Bill seeks to regulate the crypto space by requiring all firms and individuals involved in virtual asset exchange to be formally licensed and to maintain a physical presence within the country.
“The businesses and affairs of a licensee shall be managed by at least three directors of whom at least three shall be natural persons,” says the Bill that places the crypto dealers under the watch of the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).
Moreover, the bill brought forward by the Ministry of Finance will compel virtual currency exchanges and wallet providers to disclose cryptocurrency owners, if MPs approve fresh changes to the law.
The Virtual Assets Service Providers Bill of 2025 seeks to eliminate anonymity in the crypto space by requiring exchanges and wallet providers to reveal the identities of individuals behind crypto transactions on their platforms.
Additionally, the Treasury aims to ban the use of ‘mixers’ – software tools that obscure the origin of illicit funds by blending them with legitimate crypto from thousands of addresses – further tightening controls to prevent money laundering and enhance transparency
“A virtual asset service provider shall conduct its business with integrity at all times and in particular shall not undertake mixer or tumbler services or anonymity-enhancing services,” Section 22 (1, a) of the 2025 Bill states.
According to the bill, the Capital Markets Authority of Kenya does not regulate stablecoins. As a result, regulated entities within the law offering stablecoins will be regulated by the Central Bank of Kenya.
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The bill is part of the government’s broader effort to curb money laundering and illicit financial flows, aiming to strengthen regulatory oversight and boost financial integrity. The push comes after the Financial Action Task Force (FATF) placed Kenya on its grey list in February 2024, citing weaknesses in its anti-money laundering (AML) systems — particularly the lack of regulation for virtual asset service providers.
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According to FATF, Kenya primarily faces risks associated with flows of money connected to terrorism financing from both domestic and international sources,… pic.twitter.com/zsHXN1vCCC
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The new law is seen as a step toward addressing these deficiencies and helping Kenya regain international financial credibility.
The introduction of the 2025 Virtual Assets Bill to the National Assembly comes just three months after the government released a draft policy on virtual assets and service providers.
The policy highlighted the lack of a regulatory framework as a key weakness in Kenya’s efforts to combat money laundering, positioning the bill as a crucial step toward closing this gap and strengthening oversight of the digital finance space.
“A comprehensive legal and regulatory framework governing virtual asset activity and virtual asset service providers is not in place, which poses risks to the country,” said the draft.
“The government will undertake to develop a comprehensive and progressive law drawing from international standards and global best practice.”
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