Kenyan crypto firms launch unified lobby as VASP Act ushers in strict new rules

More than 50 Kenyan digital asset companies have formed the Virtual Asset Association of Kenya (VAAK) to speak with one voice as the country rolls out its new Virtual Asset Service Providers Act, a law that tightens licensing, compliance and AML controls for exchanges, wallets and payment platforms.

Kenya’s crypto industry has moved into formal lobbying mode just as the country’s new Virtual Asset Service Providers Act, 2025 (VASP Act) comes into force. Earlier this month, over 50 local and international firms active in digital assets joined forces to create the Virtual Asset Association of Kenya (VAAK), unveiled at a launch event in Nairobi’s Upper Hill district

The association’s formation comes on the heels of a busy legislative year. Parliament passed the VASP Bill in October 2025, and President William Ruto has since signed it into law, with the Act entering into force in early November. The statute establishes Kenya’s first dedicated licensing and supervision regime for virtual asset service providers, bringing crypto exchanges, custodians, stablecoin issuers and related intermediaries formally into the regulatory perimeter

Responsibility for oversight will be shared between the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA). Under the final text, CBK supervises payment-related crypto activity, including stablecoins and custodial wallets, while the CMA regulates trading venues, tokenised assets and investment-style products. A planned standalone Virtual Assets Regulatory Authority was dropped in favour of using existing financial supervisors, aligning Kenya with international standards such as FATF Recommendation 15

For VASPs, the new framework comes with significant obligations. Licensed firms must be limited companies, maintain a physical office in Kenya, appoint natural-person directors, segregate client assets from their own funds and comply with enhanced anti–money-laundering, counter-terrorist financing and data-protection rules. Annual licence renewals and potential fines of up to KSh 25 million for misconduct are expected to accelerate consolidation and push under-capitalised or non-compliant operators out of the market

VAAK leaders describe the new association as a “milestone” for Kenya’s digital asset landscape. Chair Dr Peter Onyango has publicly welcomed the move to clear rules, arguing that a predictable, balanced regime will protect consumers, improve market integrity and “enable responsible firms to thrive” The group plans to engage closely with Treasury, CBK and CMA as subsidiary regulations are drafted, particularly around IT audits, custody requirements and the treatment of stablecoins

Industry executives see both opportunity and risk. Proponents say the VASP Act will help clean up a market long plagued by scams and opaque offshore players, giving serious companies a framework to attract institutional capital and build compliant products – including, potentially, more robust payment rails for regulated online betting and gaming platforms. Others warn that high compliance costs and strict prudential standards could squeeze smaller startups, even as Kenya positions itself as a regional hub for crypto and fintech innovation

With the law now in force and a 12-month transition period running, VAAK aims to become the primary interlocutor between policymakers and the market. Its success will help determine whether Kenya’s shift from largely unregulated crypto activity to a fully licensed VASP regime delivers on its promise of greater trust, investor protection and sustainable digital-asset growth.