Kenya has published the Virtual Asset Service Providers Regulations, 2026, which is a step closer to regulating the country’s digital asset industry. The regulations provide a framework for the implementation of the Virtual Asset Service Providers Act, 2025.
The regulations establish how businesses that are dealing with cryptocurrencies and other virtual assets will be licensed, supervised and governed in Kenya.
The regulations establish how businesses that are dealing with cryptocurrencies and other virtual assets will be licensed, supervised and governed in Kenya.
The regulations apply to any person or company offering virtual asset services in or from Kenya. These include businesses that target Kenyan consumers even if they have no physical presence in the country. This means that any business that has Kenyan customers is affected.
Some of the key takeaways from the regulations include:
- Mandatory licensing for virtual asset service providers.
- Requirements regarding governance and consumer protection.
- Obligations for consumer protection.
- Cybersecurity and business continuity requirements.
- Anti-money laundering and customer due diligence rules.
- Oversight of stablecoin issuers.
- Regulation of Initial Coin Offerings (ICOs).
- Rules governing tokenisation of real-world assets.
- Market conduct and advertising standards.
- Enforcement powers and administrative sanctions.
Companies seeking licences will be required to submit business plans, governance structures, audited financial statements, cybersecurity policies, AML compliance frameworks, proof of capital and technology audits before approval by the relevant regulator.
The regulations also require virtual asset exchanges to conduct due diligence before listing digital assets, maintain fair trading rules, keep transaction records for at least seven years and implement measures to detect market abuse.
Consumer protection is another important area. Licensed firms will be required to make disclosures to customers around investment risks, fees, complaint processes, cybersecurity measures and their licensing status before they can offer services to customers.
The rules also seek to introduce licensing requirements for issuers of stablecoins, approval processes for Initial Coin Offerings and a framework for tokenising real-world assets such as property and other tangible assets.
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Also Read: 5 Ways Kenya’s Virtual Asset Service Providers Bill will transform crypto payments
