NAIROBI, Kenya Apr 3 – The government has intensified efforts to regulate the rapidly growing virtual assets sector through draft regulations developed by the Capital Markets Authority (CMA).
The proposed rules are designed to operationalize the Virtual Asset Service Providers Act, which was enacted in November last year after receiving presidential assent on November 15.
Speaking during a stakeholder engagement forum, CMA Manager for Capital Markets Jairas Muaka said the country is now at the public participation stage, allowing Kenyans to submit views on the draft regulations.
He noted that the legislation was developed by the National Treasury in collaboration with a multi-agency task force to provide a legal framework for the digital assets industry.
“To operationalize the Act, the government, through the National Treasury and a multi-agency task force, developed draft regulations which have already undergone stakeholder engagement. We are now at the stage of public participation to gather views from Kenyans,” he said.
Muaka said virtual assets—commonly known as cryptocurrencies—are already widely used in Kenya, but most service providers operate outside a regulated environment, exposing users to risks such as fraud and scams.
He warned that young people have been the most affected by fraudulent schemes in the crypto space due to the lack of oversight.
“We already have individuals and entities offering these services, but they are not in a licensed environment. This creates exposure for consumers, especially in cases of scams where there is no protection,” he said.
He added that recent public forums held in areas including Machakos and Mombasa highlighted growing concerns over crypto-related fraud targeting youth.
Under the proposed framework, all Virtual Asset Service Providers will be required to obtain licences and comply with strict operational standards.
Regulatory oversight will be shared between the Central Bank of Kenya (CBK) and the Capital Markets Authority, depending on the nature of services offered.
“The aim is to ensure that anyone providing these services is licensed and adheres to the obligations set out. This will enable us to take action against those who defraud Kenyans,” Muaka said.
He added that the regulations are expected to strengthen consumer protection, improve transparency, and support the orderly growth of Kenya’s digital asset market.