Kenya's Treasury Proposes Bill requiring crypto apps and wallet providers to disclose user identities

The proposed legislation aims to increase transparency and prevent money laundering in the crypto space.

Introduction to the Kenya Virtual Assets Providers Bill 2025

The Kenya Virtual Assets Providers Bill 2025, also known as the Virtual Assets Service Providers Bill, seeks to regulate the crypto space by requiring all firms and individuals involved in virtual asset exchange to be formally licensed and to maintain a physical presence within the country. The bill places the crypto dealers under the watch of the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).

Key Provisions of the Bill

The bill requires virtual currency exchanges and wallet providers to disclose cryptocurrency owners if MPs approve fresh changes to the law. Additionally, the Treasury aims to ban the use of 'mixers' – software tools that obscure the origin of illicit funds by blending them with legitimate crypto from thousands of addresses – further tightening controls to prevent money laundering and enhance transparency.

Regulatory Framework

The Capital Markets Authority of Kenya does not regulate stablecoins. As a result, regulated entities within the law offering stablecoins will be regulated by the Central Bank of Kenya. The bill is part of the government's broader effort to curb money laundering and illicit financial flows, aiming to strengthen regulatory oversight and boost financial integrity.

The push for regulation comes after the Financial Action Task Force (FATF) placed Kenya on its grey list in February 2024, citing weaknesses in its anti-money laundering (AML) systems — particularly the lack of regulation for virtual asset service providers. The new law is seen as a step toward addressing these deficiencies and helping Kenya regain international financial credibility.

In conclusion, the proposed Kenya Virtual Assets Providers Bill 2025 is a significant step towards regulating the crypto space in Kenya. The bill's provisions, including the requirement for crypto apps and wallet providers to disclose user identities and the ban on mixers, aim to increase transparency and prevent money laundering. The bill is part of the government's broader effort to strengthen regulatory oversight and boost financial integrity, and its passage could help Kenya regain international financial credibility.