Kenya is stepping up oversight of its fast-expanding cryptocurrency market with new draft regulations aimed at taming fraud, protecting investors, and formalizing the digital assets sector.
The proposed rules, developed by the Capital Markets Authority, are intended to operationalize the Virtual Asset Service Providers Act signed into law in November 2025. Authorities say the framework will bring long-needed structure to an industry that has largely operated without supervision.
Officials say the country has entered the public participation phase, allowing citizens and industry stakeholders to submit feedback before the regulations are finalized. According to CMA Manager for Capital Markets Jairas Muaka, the draft framework was developed by the National Treasury alongside a multi-agency task force, with earlier consultations helping shape the current proposals.
Cryptocurrency adoption has surged in Kenya, particularly among young people seeking alternative investment opportunities. However, regulators warn that the lack of oversight has exposed users to scams and fraudulent schemes. Muaka said many service providers currently operate without licenses, leaving consumers vulnerable with little legal protection when fraud occurs.
Public forums held in regions such as Machakos and Mombasa have highlighted growing concern about crypto-related scams, especially those targeting youth. The Central Bank of Kenya has also previously cautioned users about the risks associated with unregulated digital currencies.
Under the draft regulations, all Virtual Asset Service Providers will be required to obtain licenses and comply with strict operational standards. Oversight responsibilities will be shared between the Capital Markets Authority and the Central Bank of Kenya, depending on the nature of services offered.
Authorities say the goal is to ensure accountability and enable enforcement action against fraudulent operators. If adopted, the rules are expected to boost transparency, enhance consumer protection, and support sustainable growth in Kenya digital asset ecosystem.
