The Kenya Virtual Assets Service Providers Bill 2025 Seeks to Regulate Crypto Market

The Kenya Virtual Assets Service Providers Bill 2025 aims to regulate the crypto market and prevent money laundering and terrorism funding.

The proposed bill requires all individuals and firms providing services in the digital assets space to attain licenses from the Kenyan authority and build physical offices in the country.

[TECH] REGULATION | The Kenya Virtual Assets Providers Bill 2025 Gets Gazetted Ready for Discussion in Parliament: Kenya's proposed Virtual Assets Bill seeks to regulate the crypto space by requiring all fir.. https://t.co/Clpp8tlNx3 via @BitcoinKE

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“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.

In addition, the eastern African country aims to eliminate anonymity in virtual asset transactions. Hence, exchanges and wallet providers are required to reveal the identity of crypto owners on their platforms.

Furthermore, the bill frowns at the use of a mixer or tumbler services or any anonymity-enhancing services to obscure the identity of illicit transactions that promote money laundering or terrorism.

In the crypto world, a “mixer” or “tumbler” is a service that mixes users’ cryptocurrency transactions with others to obscure the origin and destination of funds, making it harder to trace the flow of money on the blockchain.

“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, stablecoins are not regulated by the country’s Capital Markets Authority. However, the Central Bank of Kenya will regulate the approved bodies providing stablecoins.

Henceforth, after the bill is passed into law, defaulters are susceptible to monetary fines, imprisonment, or both.

The Financial Action Task Force Adds Kenya to the Grey List

Moreover, the proposed bill comes after the Financial Action Task Force (FAFT) accused Kenya of not having sufficient measures to combat money laundering and terrorism financing.

In 2024, the Financial Action Task Force (FATF), an international policy-making and standard-setting body dedicated to combating money laundering and terrorist financing, added Kenya and Namibia to its grey list.

In response, Kenya published the “Draft National Policy on Virtual Assets and Virtual Asset Service Providers” and sought public opinions on it.

After several consultations and public participation forums held in various physical locations across the country, the bill has been gazetted and is ready for discussion in the country’s parliament.

African Countries Enact Anti-Money Laundering (AML) Bills

Recently, the Nigerian Government signed a new Investment and Security Act, which signals the acceptance of cryptocurrencies and also serves as a measure to fight money laundering and terrorism funding in line with international requirements.

Thereafter, South Africa’s Financial Sector Conduct Authority (FSCA) warned the public against AfriInvest and MutualWealth, citing unauthorized conduct and assurance of unrealistic returns.

The South African authority expressed that investors should only deal with individuals or companies fully licensed by the authority. It highlighted steps to verify firms that are eligible to provide financial services in the country.