The National Treasury has introduced new restrictions on the transfer of cryptocurrency licences, requiring operators to hold and actively use their permits for at least three years before they can be sold or assigned to another party.
The new Virtual Asset Service Providers (VASP) Regulations, 2026, published by Treasury Cabinet Secretary John Mbadi, also require successful applicants to commence operations within 12 months of receiving a licence.
The rules aim to curb speculative licence trading, where individuals or firms acquire regulatory licences not to operate cryptocurrency businesses but to later sell or transfer the permits for a profit once they become scarce or more valuable.
‘Upon grant of a licence under these rules, a licensee shall commence its virtual asset business within twelve months of the date of grant of the licence,’ the regulations say.
The rules require that a licensee seeking to assign or transfer a licence apply in writing to the relevant regulator and pay the prescribed fee. However, the application will only be considered if the licensee has held the licence for at least 36 months from the date operations began.
‘An application (for transfer of a licence) shall only be considered if the licensee has commenced virtual asset business and operated in accordance with any conditions imposed on the licence and held the licence for a minimum period of 36 months from the date of commencement of business,’ the new rules say.
By requiring licensees to commence operations within a year and hold their licences for at least three years before transferring them, the Treasury is seeking to ensure licences are issued only to genuine operators with long-term business plans, rather than investors looking to flip regulatory approvals.
The new guidelines form subsidiary legislation for the Virtual Assets Service Providers Act 2025, which became effective in November 2025.
The Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) are mandated to jointly license, supervise and regulate cryptocurrency exchanges, wallet providers, stablecoin issuers and other virtual asset businesses operating in the country.
Under the framework, cryptocurrency firms seeking licences are required to submit audited financial statements for the three years preceding the application. Newly incorporated firms must instead provide opening financial statements verified by an auditor.
Where the applicant is a subsidiary of a foreign-incorporated company, the regulations require submission of the parent company’s audited consolidated financial statements for the previous three years. The CBK and CMA will determine licence applications within 30 days after receiving all required documents and completing due diligence on the applicant.
Meanwhile, virtual asset exchanges will pay an initial licence fee of Sh1 million and an annual renewal fee of Sh500,000 or 0.5 percent of gross revenue, whichever is higher.
Wallet providers will pay Sh500,000 for both initial licensing and renewal, or 0.15 percent of gross turnover, while stablecoin issuers are required to pay Sh2 million for both.
Asset managers will pay an initial Sh200,000, with annual renewal fees set at 0.05 percent of assets under management, subject to a minimum of Sh200,000 and a maximum of Sh5 million.
The Treasury has allowed firms to obtain a single licence covering more than one virtual asset activity, provided that they constitute distinct lines of business with independent risk profiles or share common infrastructure.