关于我们
O’Bang Law is a regional full-service law firm with a global reach. The Firm, in supporting local and foreign investors, it has interacted with various government entities/agencies such as the Central Bank of Kenya (license acquisition), Communication Authority, Competition Authority, Directorate of Criminal Investigation, among others. We have advised on and structured several initial coin offerings (ICOs/ITOs) for entities in Australia, Austria, Canada, Nigeria, and the United Kingdom. This includes multiple assessments and cross-border collaborations on the previously applied Howey Test, generally for US SEC compliance and restructuring, and also refining the legal and regulatory language used in ICO white papers.
Introduction to Virtual Asset Service Providers Regulations 2026
The draft Virtual Asset Service Providers Regulations 2026 (the “Regulations”) is proposed pursuant to the Virtual Asset Service Providers Act (the “Act”) to operationalise the Act. The Regulations comprise about 15 key parts that address operational requirements, continuous reporting and corporate governance, statutory management, initial coin offerings, tokenisation, wallets, safety measures, capital and financial requirements, consumer and data protection, advertisements, among others.
The licenses or approvals include operating a virtual asset platform, converting virtual assets to fiat currency or vice versa, acting as a stablecoin issuer, providing asset tokenisation, operating a wallet provider, acting as an investment adviser, acting as an asset broker, acting as an asset manager, and providing an ICO.
Government Agencies
The purpose of this write-up is to provide a general overview of the Regulations and how, upon becoming law as is or subject to amendments, it will drive the virtual assets space. The Regulations acknowledge the risks associated with virtual assets, which has resulted in having multiple agencies/authorities being proposed to oversee the sector. Some of these agencies/authorities include the Central Bank of Kenya, Capital Markets Authority, Asset Recovery Agency, Financial Reporting Centre, National Intelligence Service, Nairobi International Financial Centre Authority, and others, as the National Treasury & Economic Planning Cabinet Secretary may designate.
Requirements
The requirements for securing a license or authorisation reflect other requirements for financial products regulated by the Central Bank of Kenya (CBK) or the Capital Markets Authority (CMA). These details include personal details, qualifications, personal profile, entity details, business plan, policies, third-party contracts where necessary, source of funds, application fee, and other relevant information. Upon securing the license, the successful applicant should commence operations immediately or within 12 months, as advised by the Authority, by seeking an extension of time.
An applicant (during the application process) is expected to share with the Authority any developments that are considered material events. Material events touch on issues affecting the applicant’s third-party supplier, litigation, insolvency/liquidity issues, enforcement, ownership or control, among others. These developments may affect an applicant’s application process by prolonging it or leading to rejection. However, the Authority may also rely on other independent grounds to reject an application.
Some reasons for such a rejection include failure to comply with the Authority’s requests, inability to comply with AML/CFT/CPF requirements, issues related to fit and proper, public interest or policy issues, historical breaches, or other risks as the Authority may determine.
Select Limitations
The Authority has proposed several limitations, including change of ownership requiring approvals, declaration of conflict of interest, statutory management, shareholding, several licenses, what constitutes paid-up capital, advertising models, among others. Shareholding is structured in a manner that a person providing a virtual asset exchange, stablecoin issuer and wallet provider cannot hold more than 33% and a 1/3% of the issued share capital or voting rights, directorship appointments, dividends or interest on shareholder loans.
Consumer Factors
The draft Regulations require successful applicants to ensure their business model aligns with economic good, the promotion of stability, data protection, and KYC requirements and compliance measures. Furthermore, the applicable policies must be published and enforceable by consumers. This projects the possibility of applying data protection and consumer protection laws. Some key items to be covered in the policies include access to the platform, operational hours, insurance coverage, usability and limitations, disclosures, transparency, prevention of market abuse and prohibited conduct, investigations, investor protection measures, trading fees, and dispute resolution. There are two types of disclosures a licensee needs to know: disclosures to consumers and disclosures by employees to the Authority.
The draft Regulations has a defined period of at least seven years as the data retention period. This is unlikely to affect other internal measures or compliance with other jurisdictions in which an entity is multinational.
公司治理
The virtual assets market is a sensitive sector due to money laundering and fraud; therefore, there is a strong need for robust governance mechanisms, including initial compliance with licensing requirements, ongoing reporting, and an effective board of directors. This is necessary to keep operations active while avoiding costly penalties.
Costs
There are clear cost descriptions: application, license, and renewal fees; transactional and approval fees; and share or license transfer. Other than instances where there are percentages, the fees range from KES. 20,000 to KES. 2,000,000 (these mostly address the application and license fees).
Financial
Application, License & Renewal Requirements
| TYPES | APPLICATION FEE (KSHS) | LICENSE FEE (KSHS) | RENEWAL FEE (KSHS) |
| Virtual Asset Wallet Provider | 100,000 | 500,000 | 500,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Exchange | 100,000 | 2,000,000 | 2% of the gross income of previous year or Ksh.2,000,000, whichever is higher |
| Virtual Asset Payment Processor | 100,000 | 200,000 | 200,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Broker | 100,000 | 100,000 | 100,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Assets Investment Advisor | 20,000 | 100,000 | 100,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Manager | 100,000 | 500,000 | 0.05% of assets under management or Ksh.500,000, whichever is higher |
| Virtual Asset Offering Provider – Initial Coin Offering | 100,000 | 500,000 | 500,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Offering Provider – Virtual Asset Tokenization | 100,000 | 500,000 | 500,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Offering Provider – Token Issuance | 100,000 | 500,000 | 500,000 or 0.15% of gross turnover, whichever is higher. |
| Virtual Asset Offering Provider – Stablecoin Issuance | 100,000 | 2,000,000 | 2,000,000 or 0.15% of gross turnover, whichever is higher |
Transaction Approval Fees
| Fee Type | Fee Rate Payable to the relevant regulatory authority (Kshs.) | |
| Exchange Transaction Fee | 0.05% of the transaction value payable by each counterparty in a transaction facilitated by the exchange | |
| Token issuance platform transaction fee | 0.05% of the transaction value payable by each counterparty in a transaction facilitated by the token issuance platform. | |
| Approval of Virtual Asset Offering | 0.5 % of the value of the successful offer. | |
| Approval of Stablecoin issuance | 200,000 | |
Others
| Description of fee | Amount (Kshs) |
| Approval fee for proposed acquisition, transfer or disposal of shares in a licensee. | 0.25 % of the transaction value |
| Approval fee for assignment or transfer of a licence | 0.25 % of the transaction value |
Capital Requirements
| NO. | VIRTUAL ASSET SERVICE | PAID UP CAPITAL (KSHS) | LIQUID CAPITAL (KSHS.) |
| 1. | Virtual Asset Wallet Provider | 150,000,000 | 30,000,000 or 100% of current liabilities for at least 30 days, whichever is higher. |
| 2. | Virtual Assets Exchange | 150,000,000 | Liquid net worth of a virtual asset exchange shall be an amount equal to 50% of the estimated gross operating costs of the virtual asset exchange for the next twelve months period; or such other liquid net worth amount as may be prescribed by the relevant regulatory authority. |
| 3. | Virtual Asset Payment Processor | 50,000,000 | 10,000,000 or 20% of its paid-up capital, whichever is higher. |
| 4. | Virtual Asset Broker | 30,000,000 | 6,000,000 or 8% of its total liabilities, whichever is higher. |
| 5. | Virtual Asset Investment Adviser | 2,500,000 | 1,000,000 or 8% of its total liabilities, whichever is higher. |
| 6. | Virtual Asset Manager | 30,000,000 | 6,000,000 or 8% of its total liabilities, whichever is higher. |
| 7. | Virtual Asset Offering Provider – Initial Coin Offering. | 200,000,000 | 40,000,000 or 8% of its total liabilities, whichever is higher. |
| 8. | Virtual Asset Offering Provider – Virtual Asset Tokenization. | 200,000,000 | 40,000,000 |
| 9. | Virtual Asset Offering Provider – Token Issuance Platform. | 200,000,000 | 40,000,000 or 8% of its total liabilities, whichever is higher. |
| 10. | Virtual Asset Offering Provider – Stablecoin Issuance. | 500,000,000 | 100,000,000 or 100% of current liabilities for at least 30 days, whichever is higher. |