Kenya has officially joined the list of African nations regulating digital assets after President William Ruto signed the Virtual Asset Service Providers Bill 2024 into law. The new legislation grants the Capital Markets Authority (CMA) authority to license, audit, and supervise cryptocurrency-related businesses operating in the country.
The law applies to all firms dealing in digital assets such as Bitcoin, stablecoins, and non-fungible tokens (NFTs). It establishes a legal framework for crypto exchanges, brokers, wallet providers, and token issuers—sectors that previously operated without formal oversight.
Under the new rules, all virtual asset service providers must obtain a CMA license and meet strict fit-and-proper standards. Operators are required to maintain adequate capital, conduct Know Your Customer (KYC) checks, and ensure consumer protection. They must also collaborate with the Financial Reporting Centre (FRC) to prevent money laundering, terrorism financing, and fraud.
The law mandates clear disclosure of fees and risks to users while prohibiting misleading advertisements and guaranteed-profit claims. Client funds and digital assets must be held in segregated accounts for safety. Additionally, firms issuing digital tokens, including Initial Coin Offerings (ICOs) and stablecoins, will require CMA approval.
Violations attract severe penalties: individuals operating without a valid license face fines up to Ksh.10 million or ten years in prison, while companies risk up to Ksh.20 million. Continuous offences attract daily fines of Ksh.750,000.
Kenya’s move mirrors global best practices, drawing lessons from countries such as the United States and the United Kingdom. According to UNCTAD, over four million Kenyans currently use cryptocurrencies, while the Central Bank of Kenya reports that 31% of banks are exploring opportunities in virtual assets.
By enacting this law, Kenya positions itself as a leading digital asset hub in Africa alongside Nigeria and South Africa balancing innovation with strong regulatory safeguards.
