Kenya has officially entered a new era of digital finance regulation. Building on our earlier articles on the Virtual Assets Service Providers (VASP) Bill (accessible here), the Virtual Assets Service Providers Act, 2025 (Act No. 20 of 2025) has now been gazetted and is in effect. The Act was gazetted on October 21, 2025 and came into operation on November 4, 2025.
The Act establishes the legal framework to regulate license and supervise VASPs ensuring they adhere to standards that prevent money laundering, terrorism financing and proliferation financing.
WHO REGULATES VASPS?
The Act designates two primary regulators:
1. Central Bank of Kenya (CBK) which will oversee payment service providers and crypto-related financial activities.
2. Capital Markets Authority (CMA) which will supervise virtual asset trading platforms and capital market related activities.
While the Act is now in force, no VASPs have been licensed yet. Licensing will only begin once the Cabinet Secretary, National Treasury, issues the relevant regulations in consultation with CBK and CMA.
Why This Matters:
This legislation provides the much needed regulatory clarity, paving the way for a safer, more transparent virtual asset ecosystem. It also aligns Kenya with global AML and CTF standards, boosting investor confidence and opening opportunities for compliant virtual asset businesses.
How We Can Help:
We are corporate and commercial lawyers specializing in fintech and digital finance, we provide end-to-end advisory services to businesses navigating this new regulatory landscape, including:
· Regulatory readiness audits to ensure compliance with the VASP Act.
· Preparation of internal policies and procedures aligned with AML/CTF obligations.
· Guidance on licensing applications once regulations are issued.
· Ongoing legal support to manage risks and ensure operational compliance under the Act.
Reach out to us via email at law@cmadvocates.com or contact our team for tailored support.
Contributors
Maureen Odongo - Senior Associate, Corporate-Commercial Department