Kenya to tighten rules for crypto firms. The draft Virtual Asset Service Providers Bill, 2025, by the National Treasury requires crypto companies to have a local presence and a Kenyan as CEO.
Key Points
- Physical Presence Mandatory
Crypto companies must have an office in Kenya as part of their licensing requirements. This is to protect consumers, the financial system and stability. - Local CEOs
Firms will be required to appoint a Chief Executive Officer approved by regulators such as the Central Bank of Kenya (CBK) or the Capital Markets Authority (CMA) to run the day to day operations. This is similar to the banking and capital markets sectors. - Regulatory Oversight
CMA and CBK will define the eligibility criteria for these positions to ensure experienced people lead local operations.
Other African Countries
Similar regulations already exist in countries like South Africa and Mauritius where virtual asset service providers are required to have a local presence.
Current Gaps in Crypto Regulation
Many crypto companies operating in Kenya, including exchanges, brokers and wallet service providers do not have physical offices or local executives. This new regulation will address these gaps and bring the sector under more scrutiny.
Broader Digital Market Regulation
Kenya’s push for physical presence is not limited to crypto companies.
- In 2023, the Competition Authority of Kenya (CAK) asked food delivery platforms Glovo and Uber Eats to have local offices.
- Social media companies were also asked to have a physical presence to combat platform abuse.
For Crypto Companies
The new rules will increase costs for crypto firms as they will have to:
- Have an office in Kenya.
- Hire local leadership.
- Go through Kenyan regulator approval process.
Going Forward
While the regulations will protect consumers and strengthen Kenya’s financial system, some crypto companies may be deterred by the increased costs. But proponents argue it will bring accountability and make Kenya a more attractive destination for digital finance.