Kenya and crypto-/fintech risks: assessing the AML/CFT impact of the new Virtual Asset Service Providers Act

This paper examines anti money laundering and counter terrorist financing risks associated with crypto assets and fintech activities in Kenya following the adoption of the Virtual Asset Service Providers Act 2025. The study assesses whether the new legal framework adequately addresses key gaps identified in Kenya’s AML CFT regime with regard to the regulation and supervision of virtual asset service providers. Using doctrinal legal analysis and a review of international standards including FATF recommendations and ESAAMLG assessment reports the paper evaluates the scope of licensing supervisory powers sanctions screening mechanisms and beneficial ownership requirements introduced by the Act. Particular attention is paid to the practical implementation challenges that may limit the effectiveness of the regulatory framework. The paper contributes to the policy debate on crypto and fintech regulation in emerging markets by offering a structured assessment of Kenya’s approach and by proposing practice oriented recommendations relevant for regulators international financial institutions and policymakers.