REGULATION | Kenyan President Signs into Law the AML and CTF Bill 2025 Bringing VASPs and Crypto Services Under Regulatory Purview

Kenyan President, William Ruto, has officially signed into law the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2025, signaling Kenya’s latest step in tightening financial regulations and aligning with international standards.

The move comes just days after the European Commission proposed to include Kenya in its list of high-risk jurisdictions due to strategic deficiencies in anti-money laundering and counter-terrorism financing (AML/CFT) regimes – echoing the Financial Action Task Force (FATF) decision in February 2024 to grey-list the country.

“Kenya is keen on pursuing reforms that cement our position in the region as a leader in financial integrity and regulatory reform,” said President Ruto during the bill’s signing ceremony.

The new law is designed to plug regulatory loopholes, particularly those related to property transactions and the use of shell companies, two areas long flagged as conduits for illicit financial flows.

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TL;DR

• President Ruto has signed new AML laws amid growing global pressure to curb illicit finance.
• Crypto firms will soon require licenses, physical offices, and executive vetting under a new VASP bill.
• The move aligns Kenya with FATF standards and could help lift it off the grey list.
• Insurance professionalism law also signed to strengthen sector integrity.
• Full enforcement and inter-agency collaboration will be key to the reforms’ success.

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Virtual Assets Under the Regulatory Spotlight

A major deficiency outlined in Kenya’s 2024 Mutual Evaluation Report by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) was the lack of a regulatory framework for virtual assets and Virtual Asset Service Providers (VASPs). To address this, the government has tabled the Virtual Assets Service Providers Bill, 2025, which is now under parliamentary review.

If passed, the Bill will for the first time bring crypto exchanges, wallet providers, and DeFi platforms under direct regulatory supervision in Kenya.

Key provisions include:

• Mandatory licensing for crypto firms from the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK)
• Requirement to establish a local physical presence with accessible records
• Background checks for senior executives and board members
• Compliance with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) protocols

As previously reported by BitKE, this marks a sharp policy shift for Kenya, which had maintained a largely hands-off approach to cryptocurrencies. In fact, the CBK previously issued warnings against the use of crypto assets, citing volatility and lack of regulation. However, growing adoption rates—especially among the youth and small businesses – have prompted the government to move from skepticism to regulation.

What’s at Stake?

Kenya’s inclusion on the FATF and EU grey lists has heightened scrutiny of its financial systems, potentially deterring foreign investment and raising compliance costs for local institutions. The passing of these bills is seen as a critical step to get off the grey list and restore confidence among global partners.

But experts warn that laws alone are not enough. Successful implementation will depend on:

• Adequate funding and training for enforcement agencies
• Inter-agency coordination between CBK, CMA, FRC, and DCI
• Technology-driven oversight to match the pace of innovation in digital finance

According to FATF, countries that remain grey-listed for extended periods often suffer reputational damage and are forced to deal with de-risking by global banks, which can cut off access to international finance.

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