Ahead of impending regulations from the Treasury, which will govern the licensing of crypto companies under the new Virtual Assets law, over 50 firms in the sector coalesced a new industry lobby that will engage regulators with proposed amendments or iterations.
- •The Virtual Asset Association of Kenya (VAAK), launched Tuesday in Upperhill, Nairobi, is stepping into a new regulatory landscape that has been carved by October's assent of the Virtual Asset Service Providers Act.
- •According to the new law, the industry will be accountable to a multi-agency framework under the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).
- •The CBK will oversee payment-related crypto firms such as stablecoin dealers, conversion rails, and custodial services while CMA will mostly focus on tokenized virtual assets, crypto trading and exchange platforms, plus virtual asset service providers.
“The launch of VAAK marks an important milestone for Kenya’s digital asset landscape. As an industry, we fully welcome the development of clear regulations. A predictable and well-balanced framework will protect consumers, improve market integrity, and enable responsible firms to thrive,” said the VAAK chairman, Dr. Peter Onyango.
The group’s formation follows months of wrangles between the industry and the government over how to police a rapidly rising industry. That debate sharpened the industry’s focus on credibility, compliance, and consumer protection; issues now front and center as firms prepare for licensing.
Companies attending the VAAK launch, ranging from domestic fintech startups to regional and global service providers, signaled they intend to apply for licenses once the Treasury completes subsidiary regulations.
The Incoming Laws
The law will require VASPs to maintain a physical office in Kenya, appoint natural-person directors, segregate customer assets, hold accounts in local banks, and comply with stricter AML/CFT and data-protection rules. Those obligations respond to long-standing concerns about opaque offshore entities dominating the Kenyan market without local accountability.
Kenyan-led firms are using the moment to stake an early claim in shaping the continent’s regulatory direction. Companies such as Kotani Pay, which already operates under license in South Africa, view the new framework as a chance to validate local compliance standards while differentiating themselves from foreign operators that previously thrived in a regulatory vacuum.
“Kenya has long been recognised as the Silicon Savannah because of our boldness in embracing technology. As VASPs, we are committed to aligning with emerging regulations and applying for licensing once the subsidiary rules are finalised. This will give consumers confidence, attract global investment, and position Kenya as a leader in compliant digital asset innovation,” said Samuel Kariuki, Chief Operating Officer of Kotani Pay.
The law’s annual license renewal requirement and heavier penalties for misconduct including fines up to KSh 25 million are expected to accelerate consolidation and weed out weaker players.
VAAK's Mission
VAAK members say they plan to engage closely with regulators as operational rules are finalized, particularly around IT audits, custody practices, and the treatment of stablecoins. Some stakeholders had pushed for a dedicated regime for foreign-issued stablecoins, but the law ultimately folded them into the broader virtual-asset category, reflecting a cautious approach as Kenya seeks to align with global standards while avoiding grey-listing risks.
The association is also aiming to influence Kenya’s international standing in digital finance. With policymakers positioning the country as a regional technology hub, the industry sees an opportunity to move from an informal, lightly monitored market toward a structured system that reassures investors and strengthens Kenya’s reputation across Africa’s fintech landscape.
By uniting a broad coalition of service providers just as the new regulations come into force, VAAK is positioning itself as the sector’s primary interlocutor at a time when Kenya is bringing crypto activity formally into the regulatory perimeter.
