Kenya’s Treasury Unveils Formal Framework for ICOs and Token Sales

The move, embedded in the newly‑enacted Virtual Asset Service Providers (VASP) Act of 2025, is intended to shift Kenya from a vague “grey area” on crypto to a fully regulated environment and to position the East African nation as a regional hub for Web3 and fintech innovation.

Under the new framework, firms that wish to conduct an ICO must be incorporated in Kenya—or, if foreign‑registered, must hold a local certificate of registration—maintain a physical office, and satisfy capital and transparency thresholds set by regulators. The Capital Markets Authority (CMA) will supervise virtual‑asset trading platforms, crowdfunding portals and tokenised securities, while the Central Bank of Kenya (CBK) will retain oversight of stablecoin issuers and any payment‑related digital‑asset activity.

The policy also tightens investor protection. Companies launching token sales will be required to disclose all risks and fees in full and to put in place internal dispute‑resolution mechanisms. Tax treatment has been overhauled as well: the 3 % digital‑asset tax introduced in the Finance Act of 2024 is being replaced by a 10 % excise duty on service fees collected by exchanges and brokers, according to the Finance Act 2025.

Kenya’s pivot comes after years of scepticism from both the Treasury and the CBK, which had repeatedly warned against the unregulated sale of virtual assets. The decision arrives as Africa’s crypto market continues to expand. According to a recent report by Luno, the continent saw a 30 % increase in crypto trading volume in 2024, with Kenya ranking among the top five African countries by user base.

If the regulations prove effective, Kenya could see a surge in tokenised fundraising, ranging from utility tokens for blockchain‑based platforms to security tokens that represent equity or debt. Such developments would broaden the capital‑raising toolkit for Kenyan entrepreneurs, who have traditionally relied on bank loans or equity financing from a limited pool of angel investors.

If successful, Kenya’s regulatory experiment could serve as a template for other African nations wrestling with how to harness blockchain’s potential without compromising financial stability. The country’s ambition to become a Web3 hub may soon be measured not just in policy announcements, but in the number of home‑grown token offerings that actually reach the market.

Source: here