Kenya has entered a new era of cryptocurrency regulation with the implementation of the Virtual Assets Service Providers (VASP) Act, 2025.
In a joint notice dated Tuesday, November 18, 2025, the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK) announced that the Act, which was gazetted on October 21, 2025, came into effect on November 4, 2025.
“The Virtual Assets Service Providers Act, 2025 (Act. No. 20 of 2025), which was gazetted on October 21, 2025, became effective on November 4, 2025. The Act provides the legislative framework for regulating and supervising Virtual Asset Service Providers (VASPs). The Act further outlines obligations of VASPs in the prevention of Money Laundering, Terrorism Financing, and Proliferation Financing,” said CMA.
The Virtual Assets Service Providers Act, 2025 (Act No. 20 of 2025) provides a legislative framework for regulating and supervising Virtual Asset Service Providers (VASPs).
New rules for Cryptocurrency Take Effect
According to the CMA, the Act serves as a comprehensive framework for overseeing virtual asset service providers in the country.
The legislation designates the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) as the key regulators responsible for licensing, monitoring, and supervising VASPs.
Additionally, the law imposes obligations on service providers to prevent money laundering, terrorist financing, and proliferation financing.
However, the CMA stated that while the Act establishes the legal groundwork for licensing, no virtual asset service providers have yet been licensed to operate in or from Kenya.
The Cabinet Secretary for the National Treasury, with advice from the CBK and CMA, is in the process of developing regulations to guide the implementation of the Act. Licensing will commence once these regulations are issued.
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CBK and CMA will license VASPs based on the services outlined in the Act’s First Schedule, ensuring compliance with Kenya’s stringent regulatory standards. For further information regarding the new regulations, the public is advised to reach out to the following contacts:
– Central Bank of Kenya: +254 20 2860000/1000 | [email protected]
– Capital Markets Authority: +254 20 2264400, 0722 207767 | [email protected]
The Virtual Assets Service Providers (VASP) Act, 2025, is a Kenyan law that establishes a comprehensive framework for licensing and regulating entities involved in virtual assets, such as cryptocurrencies and tokenized assets.
About the Virtual Assets Service Providers Act, 2025
Signed into law on October 15, 2025, the Act aims to strike a balance between financial innovation and security, consumer protection, and the prevention of financial crimes.
The primary objectives of the Act are to:
– Provide a clear legal framework for VASPs operating in or from Kenya.
– Integrate the virtual asset sector into the existing financial system.
– Align Kenya with international standards, particularly the Financial Action Task Force (FATF) recommendations on anti-money laundering (AML), countering the financing of terrorism (CFT), and countering proliferation financing (CPF).
– Protect consumers and enhance investor confidence in the digital asset ecosystem.
Any legal entity (excluding natural persons, who are prohibited from operating as VASPs) wishing to provide virtual asset services must obtain a license from the relevant regulatory authority.
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Key requirements for licensing include:
– Incorporation and physical presence: VASPs must be a local company registered in Kenya or a registered foreign company, and they must maintain a physical office in the country.
– Capital and solvency: Licensees must meet prescribed capital, solvency, and insurance requirements to ensure financial stability.
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