Kenya wants crypto firms to open local offices, appoint gov’t-approved CEOs

Kenya is proposing a raft of regulations that require cryptocurrency firms operating in the country to set up offices locally as the state works towards governing crypto trade.

The Virtual Asset Service Providers Bill, 2025 published by the National Treasury states: “A virtual asset service provider shall maintain a registered office in Kenya.”

The government wants to license crypto trade and have companies like Binance and Coinbase appoint chief executive officers or directors subject to approval from a regulatory body such as the Capital Markets Authority (CMA).

The draft law says the government will vet the heads of these companies to ensure that on top of educational and professional qualifications, they have not committed any offence involving dishonesty or fraud or contravened any law concerning virtual assets.

Further, crypto companies will be managed by a board of at least two directors.

“The board of directors of a licensee shall comprise of natural persons only and a director shall not serve in more than one board,” says the proposed law.

Cryptocurrency is a type of digital currency secured by cryptography which exists on decentralised networks using blockchain technology.

This is to make it hard to counterfeit or double-spend the currency. Bitcoin is the world’s first and biggest cryptocurrency launched in 2009.

Cryptocurrencies are not issued by any central authority and are therefore free from government interference or manipulation.

Crypto has mostly been used to preserve savings, pay for goods and services internationally, and make remittances.

Unlike banks and credit card companies which verify transactions, using cryptocurrencies is seen as an easier way of transferring funds directly between two parties globally.

Additionally, one does not need to buy euros or dollars or pay to use cross-border money transfer services like Western Union.

Crypto companies don’t have offices in the countries where they operate globally. Some of the top ones don’t even have physical headquarters.

Binance, for example, was initially based in China, then moved to Japan just before China’s crypto restrictions. It then relocated to Malta but now, it has no official headquarters.

Coinbase, despite being publicly traded in the U.S. where it is also the largest crypto exchange by volume, has no physical offices and all employees work remotely.

Because of the decentralised nature of cryptocurrencies, the sector has been exploited for illegal activities like theft, fraud and money laundering.

Cryptocurrency prices are also very volatile and investments require accurate price monitoring.

Bitcoin has been trading at over $100,000 since Donald Trump was elected U.S. president in November over the optimism that his administration will be crypto-friendly.

The cryptocurrency hit a record high of $109,071 (Ksh.14.1 million) on Monday when he was sworn in but later pared those gains and was last trading at $101,705 (Ksh.13.1 million).

Kenya’s latest developments follow last October’s announcement that the government would introduce a new tax system integrating real-time crypto transaction monitoring.

This is part of the Kenya Revenue Authority (KRA)’s bid to tap into – and catch tax cheats and criminals in – the local crypto sector.

While crypto and digital currency broadly are still not mainstream in Kenya compared to other disruptive digital financial services like mobile money, KRA painted a huge potential for the sector, which has an estimated four million users, according to UNCTAD figures.

According to the tax authority, Kenya’s crypto market transacted about Ksh.2.4 trillion between 2021 and 2022, close to a fifth of the country’s gross domestic product (GDP).

At the same time, a new bill introduced in Parliament in 2023 aims to introduce taxation on cryptocurrency transactions and digital wallets.

The Capital Markets (Amendment) Bill, 2023 by Mosop MP Abraham Kirwa seeks to amend the Capital Markets Act, Cap. 485A to include a digital currency within the definition of securities, which, if passed, will give KRA capital gain tax on exchanges and excise duty on transactions.

The National Assembly finance committee approved the bill and it is still in Parliament.

Other African countries mulling crypto regulation in recent months include Rwanda, while South Africa in 2022 declared crypto assets as ‘financial products’ subject to regulation.