The National Treasury has launched nationwide public participation on the draft Virtual Asset Service Providers (VASPs) Regulations, 2026, aimed at guiding the operationalisation of virtual asset services in the country amid rising concerns over capital flight, cybercrime, fraud, and consumer protection.
In November last year, the Virtual Asset Service Providers Act, 2025, was enacted into law, providing Kenya with a legal and regulatory framework for virtual assets (VAs) and VASPs.
The draft regulations seek to operationalize the provisions of the Act by establishing a safe, transparent, and innovative regulatory environment for virtual assets. A virtual asset is a digital representation of value that can be traded or transferred electronically and used for payment or investment purposes such as crypto assets and digital tokens.
Capital Markets Authority (CMA) Senior Manager for Policy and Regulatory Framework, Jairus Muaka, said during a public participation forum covering Mombasa, Kwale, Kilifi, and Taita Taveta counties that the regulations will also outline licensing and supervisory requirements for VASPs.
He added that the framework will mitigate financial integrity risks by enforcing Anti-Money Laundering, Countering the Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) standards, alongside market conduct rules and cybersecurity requirements.
“It will also enhance consumer and investor protection through disclosure requirements, safeguarding of client assets, and robust complaint-handling mechanisms, while promoting financial stability by imposing prudential standards, including capital and reserve requirements on VASPs,” said Muaka.
He noted that the regulations are designed to protect Kenyans who are increasingly turning to virtual assets as an alternative form of investment and value transfer due to their speed, cost efficiency, cross-border nature, convenience, and anonymity.
“But beyond that, Kenya is known as a hub of innovation. We want to leverage this strength while ensuring adequate protection for users. We are also encouraging Kenyans to remain innovative and take advantage of these opportunities,” he added.
On security, Muaka revealed that a multi-agency task force has been established, comprising the CMA and the Central Bank of Kenya (CBK) as regulators, alongside the National Intelligence Service, National Computer Crime Committee, Directorate of Criminal Investigations, and the Financial Reporting Centre.
“We have key agencies working together to ensure that as we implement this legal framework, effective regulation is in place. This collaboration will help guarantee the safety of Kenyans as they engage in this space,” he said.
He further disclosed that the CMA is in the process of acquiring a system and relevant tools for surveillance and data analysis.
“The main supplier of this system is a company called Chainalysis. We are already engaging them to ensure that by the time the law comes into effect, hopefully by June, we will have the necessary infrastructure in place,” said Muaka.
Ronald Ng’eno from the National Treasury emphasised that VASPs involved in money laundering or fraud will face strict consequences under the new framework, which will also empower consumers to lodge complaints with the CMA and the Central Bank of Kenya.
“VASPs’ systems will be audited, and those found to be misusing customers’ funds will be penalized,” he stated.
By Sadik Hassan
