Regulating the Unregulated: Kenya’s Crypto Crackdown Begins
Kenya’s push for ownership transparency marks the first serious step toward digital asset regulation — and a warning shot for platforms operating in the shadows.
A Sector Grows in the Shadows
Kenya’s crypto ecosystem has grown fast — faster than most governments can keep up with. Platforms have emerged to serve everything from cross-border remittances to savings and payments. But there’s been one glaring problem: no one’s really watching.
Now that’s starting to change.
In response to mounting pressure from the IMF and global watchdogs like the Financial Action Task Force (FATF), Kenya’s National Treasury is proposing a law to bring basic transparency to the crypto space — starting not with users, but with the people running the platforms.
What the Proposed Law Actually Does — And Why It Matters
Let’s be clear: this law isn’t targeting everyday crypto users.
It’s aimed at the people who run the platforms — the founders, owners, and controllers of crypto exchanges, wallet services, and other digital asset businesses.
The proposal seeks to amend the Capital Markets Act so that these businesses will be legally required to disclose their beneficial owners — the real people behind the company name.
Why is this such a big deal?
Because without this kind of transparency, anyone can set up a crypto business using proxies, shell companies, or fake identities. And once that happens, it becomes nearly impossible for authorities to trace who’s behind suspicious transactions, sanction evasion, or criminal flows of money.
In short: you can’t fight financial crime if you don’t know who you’re dealing with.
Step One of a Bigger Puzzle — FATF’s Checklist and Kenya’s Gaps
You might ask — shouldn’t regulators focus on customer verification? On tracking the people using these platforms to move money?
Yes — but that comes next.
According to FATF, any effective digital asset compliance system starts with a clear sequence:
Identify who owns and controls crypto platforms
Require those platforms to conduct proper KYC and onboarding
Ensure ongoing transaction monitoring and reporting
Kenya’s proposed law is step one. It’s not a crackdown on users. It’s a move to pull crypto platforms out of the legal shadows and put their operators on the map.
Only once that’s done can meaningful oversight — like KYC and transaction monitoring — be applied.
The Bigger Picture: IMF Concerns and Global Standards
This legislative shift isn’t just homegrown. The IMF has expressed concern that Kenya’s fast-growing crypto sector could be exploited for money laundering and illicit finance — especially without any enforcement or registration requirements.
The FATF, the global body that sets anti-money laundering (AML) standards, has been urging countries to apply the same level of scrutiny to Virtual Asset Service Providers (VASPs) as they do to banks.
That means:
Transparent ownership structures
Customer due diligence (KYC)
Sanctions screening
Recordkeeping
Monitoring for suspicious behavior
So far, Kenya has made progress with taxation (through the Digital Asset Tax), but not on compliance. This proposal is a step toward closing that gap.
What This Means for VASPs, Fintechs, and Everyone in Between
If this law passes, crypto platforms operating in Kenya — local or international — will need to get serious about transparency.
That includes having:
Proper registration and licensing
Clear governance structures
Internal controls to prepare for future KYC and AML rules
But it’s not just crypto-native companies that should pay attention.
Remittance providers, mobile money platforms, fintechs, and even real estate agents or law firms dabbling in digital assets could soon find themselves under increased scrutiny as Kenya moves to align with international norms.
How Anqa Helps
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Risk Assessment Tool — simple, guided workflows to assess client risk based on nature, purpose, and red flags
Red Flag Insights — practical, context-aware indicators for detecting suspicious behavior
Free Resources and Training — tailored for institutions across Africa and Asia
We work month-to-month — no annual contracts, no lock-in. Because access to compliance infrastructure shouldn’t depend on your size or legal budget.
Kenya’s Crypto Crossroads
This moment matters.
Kenya isn’t banning crypto. It’s regulating it — and trying to do so in a way that keeps innovation alive while building trust and accountability.
That starts by knowing who’s in the game.
This proposed law may not answer every question — but it asks the right one:
Who’s behind the platform you’re trusting with your money?
The age of unregulated crypto in Kenya is ending. What comes next is up to all of us.
Got questions? Need help preparing for what’s coming?