‎ New Legislation Empowers CMA to Oversee and License Crypto Firms

By Esther Murigi

The Capital Markets Authority (CMA) has officially been granted the mandate to regulate cryptocurrency activities in Kenya after the passing of a new financial law. The law gives the CMA powers to license, monitor, and audit crypto firms, marking a major step in the government’s effort to bring order and trust to the fast-growing digital currency market.

‎‎For years, Kenya’s cryptocurrency space has operated without clear regulation, leaving investors exposed to fraud, scams, and unreliable trading platforms. With the new law, the government hopes to ensure that all companies dealing with digital assets follow proper financial rules and protect the interests of ordinary Kenyans.‎

‎The amended Capital Markets Act, which was recently signed into law, empowers the CMA to vet and approve all businesses engaging in crypto-related services. This includes cryptocurrency exchanges, brokers, wallet providers, and investment advisors. The Authority will also have the right to audit its books, monitor transactions, and take disciplinary action where necessary.‎

‎According to Treasury Cabinet Secretary Njuguna Ndung’u, the new regulatory framework aims to create a balance between innovation and investor safety. He said the government recognizes the potential of digital assets to support economic growth but wants to ensure that the sector operates within proper legal boundaries.

Prof. Ndung’u said that they are  not against innovation or technology. What they want is accountability and transparency. Many Kenyans have lost money through unregulated platforms. This law gives CMA the power to ensure that such cases do not continue.

‎‎The decision follows a period of increased public interest in cryptocurrencies across Kenya. Reports suggest that over 4.5 million Kenyans have engaged in some form of digital currency trading, making the country one of the leading crypto adopters in Africa. However, the lack of oversight has led to an increase in scams and pyramid schemes disguised as digital investment platforms.

‎‎CMA Chief Executive Wyckliffe Shamiah welcomed the new law, saying it provides a solid foundation for responsible innovation in the digital finance space. He noted that the Authority will work closely with other regulators such as the Central Bank of Kenya (CBK) and the Financial Reporting Centre (FRC) to ensure smooth implementation.

‎Mr. Shamiah said this marks a turning point for Kenya’s financial markets. The CMA will ensure that all crypto firms operating in the country meet the same high standards required of other licensed financial institutions.

‎The CMA plans to roll out a licensing and registration framework over the coming months. This will require all crypto companies to disclose ownership details, security measures, and financial statements before receiving approval. The Authority will also conduct audits to verify compliance with anti-money laundering and consumer protection rules.

‎Financial analysts have praised the move, saying it could help restore confidence among local investors who have been wary of digital currencies. Economist Grace Njeri noted that with clear regulations, more people may feel safer investing in the sector.

‎‎Njeri added that the  law will make it easier for investors to know which platforms are legitimate. It could also attract international firms to set up operations in Kenya, which would boost innovation and create jobs

‎‎However, some industry players have expressed concerns that too many restrictions might discourage smaller startups from entering the market. They argue that heavy regulation could limit creativity and slow down the pace of technological advancement in the crypto space.

‎‎To address this, the CMA has said it will adopt a balanced approach that promotes innovation while safeguarding public interest. The Authority has promised to engage the public and key stakeholders through consultations before finalizing the detailed rules.

‎‎Kenya’s growing interest in digital assets has been driven by factors such as limited access to formal banking, the popularity of mobile money, and rising youth interest in online investments. With internet access expanding and financial technology advancing rapidly, the new law aims to position Kenya as a leader in safe and responsible crypto adoption in Africa.

‎The country now joins a growing list of nations including South Africa and Nigeria that are introducing formal rules to manage digital currencies. Experts believe that regional cooperation on crypto regulation could help curb cross-border financial crimes and improve tax compliance.‎

‎For ordinary Kenyans, the biggest change will be increased protection from fraud. Once the CMA begins licensing crypto firms, investors will be able to verify which companies are legitimate and which ones are operating illegally. This transparency is expected to build confidence and reduce the number of online scams.‎

‎In the long run, the government hopes that digital assets can contribute to Kenya’s vision of becoming a technology-driven economy. The regulation of crypto activities is also expected to improve the country’s image in global financial markets by aligning with international standards on anti-money laundering and financial security.

‎‎The CMA has urged Kenyans to be patient as it finalizes the guidelines and to continue being cautious when engaging in online investments. The Authority emphasized that any firm or platform claiming to offer crypto services in Kenya will soon be required to have an official license.

‎‎In a statement, CMA said that once the licensing framework is in place, we encourage investors to use only approved platforms. Our goal is to make Kenya a safe space for innovation, not exploitation.

‎‎The execution of the new law represents an important step in Kenya’s financial history. By bringing cryptocurrencies under the watch of the CMA, the government has taken a bold step toward embracing digital finance while protecting citizens from the risks that come with it.

‎‎With clear rules and active oversight, Kenya could soon become one of Africa’s most trusted hubs for digital asset innovation, proving that regulation and technology can work hand in hand for the country’s economic growth.

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The Author is Esther Murigi certified Broadcast Journalist