Kenya is proposing a set of regulations that require cryptocurrency firms operating in the country to establish local offices as part of efforts to govern crypto trade effectively.
The Virtual Asset Service Providers Bill, 2025, published by the National Treasury, states: “A virtual asset service provider shall maintain a registered office in Kenya.”
The proposed law seeks to license crypto trade and mandates companies like Binance and Coinbase to appoint chief executive officers or directors who will be vetted by the government.
The vetting process will assess their educational and professional qualifications and ensure they have not committed offences involving dishonesty, fraud, or violations of virtual asset laws.
Additionally, the law stipulates that these companies must be managed by a board comprising at least two directors, all of whom must be natural persons. Directors are also prohibited from serving on more than one board.
Cryptocurrency, a digital currency secured by cryptography and based on decentralized blockchain networks, is designed to be difficult to counterfeit or double-spend. Bitcoin, launched in 2009, remains the world’s largest cryptocurrency.
Unlike traditional currencies issued by central authorities, cryptocurrencies operate without government interference or manipulation, offering a streamlined way to transfer funds globally without relying on banks or money transfer services.
However, the sector’s decentralized nature has made it vulnerable to illegal activities such as theft, fraud, and money laundering. Cryptocurrency prices are highly volatile, requiring investors to closely monitor market trends.
Kenya’s latest regulatory move follows the government’s October 2024 announcement of a new tax system designed to monitor crypto transactions in real-time.
The Kenya Revenue Authority (KRA) aims to curb tax evasion and criminal activities within the local crypto sector, which has an estimated four million users, according to UNCTAD figures. The KRA revealed that Kenya’s crypto market transacted approximately Ksh.2.4 trillion between 2021 and 2022, nearly 20% of the country’s GDP.
In addition to the Virtual Asset Service Providers Bill, a separate bill introduced in 2023 by Mosop MP Abraham Kirwa seeks to amend the Capital Markets Act to include digital currencies within the definition of securities. If passed, this amendment would subject cryptocurrency transactions and digital wallets to capital gains tax and excise duty. The National Assembly Finance Committee has approved the bill, which is currently under parliamentary review.
Kenya joins other African nations, such as Rwanda and South Africa, in exploring cryptocurrency regulation. South Africa declared crypto assets as “financial products” subject to regulation in 2022. Globally, major crypto companies like Binance and Coinbase have historically operated without physical headquarters, often relying on remote workforces. However, Kenya’s proposed regulations signal a shift towards requiring a tangible presence and stricter oversight in the industry.
