Cryptocurrency exchanges and platforms will be required to report their identity and transactions of their clients to the Kenya Revenue Authority (KRA) if MPs back proposals in the Finance Bill that seek to make it harder for investors in the digital assets to hide their gains from the taxman.
Through amendments contained in the Finance Bill 2026, virtual asset service providers will be required to disclose full transaction records for Kenyan customers via annual filings to the KRA.
The records include how much they paid, how much they sold their assets for, and any profits made, as well as those making payments for goods using cryptocurrencies.
Local traders are increasingly using crypto to pay for imports and Kenyans in the diaspora use the digital assets to wire cash to family.
Multinationals are also tapping stablecoins to repatriate billions of shillings, bypassing local commercial banks.
The KRA will seek to nail cheats exploiting the anonymity offered by crypto exchanges to evade the taxman’s net.
The Finance Bill 2026, which has been tabled in the National Assembly, proposes amendments to the Tax Procedures Act through the introduction of Sections 6C and 6D, effectively pulling Kenya’s crypto economy into the formal tax net.
It will compel digital asset trading platforms to annually disclose users and their transactions to the KRA, while also paving the way for automatic exchange of virtual asset information with foreign governments.
‘Each virtual asset service provider shall file an information return with the Commissioner in respect of all the virtual-asset users with which it maintains a relationship in every calendar year and that are identified as reportable users or as having controlling persons that are reportable persons,’ reads the proposed Section 6C.
Information sharing
Section 6D allows the KRA to enter into information-sharing agreements with foreign tax authorities, similar to existing arrangements under which Kenyan authorities share banking details such as account balances, interest income and beneficial ownership information with foreign counterparts.
‘Kenya may enter into an agreement with another country for the automatic exchange of information relating to transactions involving virtual assets,’ says the Finance Bill 2026, which will be subjected to public participation before being debated by lawmakers.
Kenya seeks to be part of the global trend that is bringing crypto trading mainstream.
New global reporting rules came into force on January 1, 2026, and made it harder for crypto investors in more than 40 countries to hide their gains from international tax authorities.
As part of the rules, from 2027, tax authorities in tens of countries will automatically share information received from exchanges with other participating tax authorities, which include all EU countries, as well as the Channel Islands, Brazil, the Cayman Islands and South Africa.
The global rules on reporting crypto dealings were developed by the Organisation for Economic Co-operation and Development (OECD), known as the Cryptoasset Reporting Framework (Carf).
Overall, 75 countries have committed to implement the Carf rules, with crypto hubs such as the UAE, Hong Kong, Singapore and Switzerland set to implement the rules from 2027 and start exchanging information from 2028.
The US is set to implement the rules from 2028 and start exchanging information from 2029.
In Kenya, giving false information will attract a fine of Sh100,000 for each false entry, imprisonment for three years or both. Those who omit information will be fined Sh100,000 for each omission.
This is part of a strategy to catch tax dodgers in the largely secretive market segment, which criminals can also exploit to support illicit activities such as theft, fraud and money laundering.
The taxman estimated that between 2021 and 2022, Kenya’s cryptocurrency market transacted about Sh2.4 trillion, representing close to 20 percent of the country’s GDP.
Crypto use
Analysis by Chainalysis, a New York-based blockchain data platform that tracks crypto use, found that Kenya made Sh426.4 billion ($3.3 billion) worth of transactions in stablecoins in the year to June 2024.
A stablecoin is a type of cryptocurrency backed by assets considered reliable, such as the US dollar.
Buying and selling of digital assets is done on crypto exchanges such as Binance and Coinbase, which are the targets of the proposed law change.
Kenya had at first been reluctant to embrace trading in digital assets, with the Central Bank of Kenya (CBK) fearing that they would spawn money laundering schemes and compromise the integrity of the country’s financial system.
But as the reality of these virtual assets dawned and many countries accepted them, Kenya was forced to soften its hard stance and even introduced a digital asset tax, which is deducted by exchanges from traders at a rate of three percent and remitted to KRA.
Now, these exchanges will additionally be expected to undertake customer identification, identify beneficial owners and track all transactions, ending the anonymity that has been the hallmark of crypto trading.
Anonymity has not only been attractive to tax cheats, it has also made virtual assets such as Bitcoin the preferred currency for criminals dealing in dirty money, including drug traffickers, terrorists, fraudsters and arms smugglers.
Carf also requires tax authorities to share information on the legal and beneficial owners of assets, companies and accounts.
The global tax transparency framework that Kenya seeks to align with through the Finance Bill 2026 already facilitated the exchange of information on 123 million bank accounts holding assets worth pound 12 trillion in 2022, underscoring the growing international crackdown on hidden wealth and offshore tax evasion.
Although Kenyans have been trailblazers in the adoption of cryptocurrency on the continent, the country has lagged behind its peers in putting in place a proper regulatory framework that gives comfort to investors in virtual assets.
A 2025 report by audit firm PwC revealed that South Africa and Mauritius have introduced extensive crypto legislation and regulation, including requirements for exchanges and service providers to share sender and recipient information for transfers as part of anti-money laundering rules.