Kenya Says No Crypto Firms Licensed Yet — But Bitcoin ATMs Are Already Live

New Law Creates Framework But Leaves Gap Between Rules and Reality

Bitcoin ATMs have emerged in several prominent Nairobi shopping centers shortly after Kenya's new cryptocurrency legislation took effect in late 2024, creating a notable regulatory gap. The installations appeared at high-traffic locations including Two Rivers Mall, Westlands, and along Ngong Road, coinciding with the Virtual Assets Service Providers Act becoming operational. However, regulators have confirmed that no operators have yet received formal licensing approval to operate these machines.

In a joint notice issued in mid-November 2024, the Central Bank of Kenya (CBK) and Capital Markets Authority (CMA) cautioned the public that no Virtual Assets Service Providers (VASPs) have been licensed under the new Act to operate in or from Kenya. The regulators warned that any firm claiming authorization is doing so illegally and urged citizens to exercise caution when engaging with such services.

"The Cabinet Secretary, National Treasury is developing and shall issue Regulations for further guidance on implementation of the Act," the joint statement from CBK and CMA emphasized. The regulators clarified that the licensing process will only commence after the National Treasury issues detailed implementation regulations, which are currently under development.

The Virtual Assets Service Providers Act, which was gazetted on October 21, 2024, and became effective in early November, establishes the legislative framework for regulating cryptocurrency service providers throughout Kenya. This comprehensive legislation designates CBK and CMA as joint regulators responsible for licensing all VASPs operating within the country's jurisdiction.

The law's scope encompasses various cryptocurrency businesses including digital asset exchanges, custodial wallet providers, and trading platforms. It outlines strict obligations for operators to implement anti-money laundering (AML) measures and counter-terrorism financing (CTF) protocols, aligning Kenya with international standards for financial crime prevention.

Kenya's parliament passed the groundbreaking bill in October 2024 following sustained advocacy from fintech industry stakeholders and blockchain technology proponents. Finance committee chair Kuria Kimani explained that the legislation, modeled on regulatory frameworks from the United States and United Kingdom, aims to fill a critical regulatory void that has previously hindered investor confidence and stifled legitimate cryptocurrency business development.

The timing of Kenya's regulatory initiative came amid broader momentum across the East African region. Neighboring Uganda launched an ambitious $5.5 billion real-world asset tokenization project in late 2024, paired with a Central Bank Digital Currency (CBDC) pilot program, signaling growing regional interest in blockchain-based financial infrastructure.

Bitcoin Circulates Across Kenya

While the mall-based Bitcoin ATM installations represent the most visible cryptocurrency infrastructure in Nairobi's formal retail economy, Bitcoin has already been circulating in lower-income neighborhoods for several years, demonstrating organic adoption at the grassroots level.

According to local reports, in Soweto West within Kibera—one of Africa's largest informal settlements—fintech startup Afrobit Africa began distributing Bitcoin-denominated grants in 2022. The initiative specifically targeted garbage collectors and sanitation workers who lacked traditional identification documents, bank accounts, or access to mobile money services like M-PESA.

These workers receive Bitcoin compensation after completing weekend community clean-up activities rather than receiving payment in Kenyan shillings. Over the program's duration, approximately $10,000 in Bitcoin value has been injected into the local community economy, creating a small but functioning cryptocurrency ecosystem.

Currently, around 200 Bitcoin users reside in Soweto West, with local merchants and motorcycle taxi (boda boda) drivers accepting cryptocurrency payments via the Lightning Network—a second-layer payment protocol that enables near-instantaneous transactions with minimal fees. This adoption demonstrates how cryptocurrency can provide financial inclusion for populations underserved by traditional banking infrastructure.

Damiano Magak, a 23-year-old garbage collector participating in the program, shared that he often prefers receiving Bitcoin over M-PESA mobile money transfers. He cited lower transaction fees and greater reliability, noting that M-PESA sometimes experiences delays or service disruptions. His testimony illustrates how cryptocurrency can offer practical advantages for low-income workers in developing economies.

The grassroots Bitcoin adoption in informal settlements like Kibera presents an interesting contrast to the formal retail ATM installations, suggesting that cryptocurrency usage in Kenya has developed along multiple parallel tracks—both through organized fintech initiatives and through traditional commercial infrastructure.

Global Crackdown on Crypto ATMs Intensifies

The unregulated emergence of Bitcoin ATMs in Kenya stands in sharp contrast to mounting international enforcement actions against similar operations in developed markets, highlighting the global regulatory challenges surrounding cryptocurrency infrastructure.

Recently, federal prosecutors in Chicago indicted Firas Isa, founder of Crypto Dispensers, on money-laundering conspiracy charges. The indictment alleges that his company processed at least $10 million in proceeds from fraud schemes and drug trafficking through Bitcoin ATMs nationwide between 2018 and 2025. The charge carries a maximum sentence of 20 years in prison. Both Isa and his company, Virtual Assets LLC, have pleaded not guilty to the allegations.

In late 2024, Australian Home Affairs Minister Tony Burke announced that the Australian Transaction Reports and Analysis Centre (AUSTRAC) would receive enhanced powers to restrict or prohibit cryptocurrency ATM operations. This decision came after regulatory investigations found that 85 percent of funds from top users of these machines were connected to scam activities.

Australia has experienced explosive growth in cryptocurrency ATM installations, with the number of machines surging from just 73 in 2022 to over 2,000 by late 2024. This rapid proliferation has raised concerns among law enforcement and financial regulators about the potential for these machines to facilitate illicit financial activities.

The United States Federal Bureau of Investigation (FBI) reported nearly 11,000 cryptocurrency ATM-related complaints throughout 2024, with total losses exceeding $246 million. Meanwhile, Federal Trade Commission (FTC) data showed that losses from crypto ATM scams jumped dramatically from $12 million in 2020 to $114 million in 2023—representing a nearly tenfold increase in just three years.

Particularly concerning is the demographic profile of victims: individuals aged 60 and above accounted for over two-thirds of reported cases, suggesting that elderly populations are disproportionately targeted by scammers exploiting cryptocurrency ATMs. These machines often appeal to scammers because they can facilitate irreversible transactions with limited identity verification.

These international enforcement trends underscore the regulatory challenges that Kenya may face as Bitcoin ATMs proliferate before formal licensing procedures are established. The experiences of the United States, Australia, and other developed markets suggest that cryptocurrency ATMs require robust regulatory oversight, strict anti-money laundering controls, and consumer protection measures to prevent their exploitation for illicit purposes.

As Kenya develops its implementation regulations for the Virtual Assets Service Providers Act, policymakers will likely examine these international case studies to design an effective licensing framework that balances innovation with security and consumer protection.

FAQ

What is Kenya's current regulatory attitude toward cryptocurrency and why haven't licenses been issued yet?

Kenya maintains a cautious regulatory stance on cryptocurrency, viewing it as an emerging asset class requiring careful oversight. The Central Bank of Kenya has not yet issued formal licenses to crypto firms as regulators are still developing comprehensive frameworks to ensure consumer protection, prevent money laundering, and manage financial stability risks. However, Bitcoin ATMs operate in a regulatory gray area, allowing some crypto activity while formal licensing mechanisms are being finalized.

Are Bitcoin ATMs legal in Kenya? How do they operate without official licensing?

Bitcoin ATMs in Kenya operate in a regulatory gray area. While the Central Bank hasn't officially licensed crypto firms, these ATMs function as money transfer services rather than regulated exchanges. They remain operational because Kenya's framework doesn't explicitly prohibit them, allowing for practical adoption ahead of formal regulations.

Is it safe to conduct transactions using Bitcoin ATMs in Kenya? What risks should be noted?

Bitcoin ATMs in Kenya offer convenient access, but maintain standard security practices: use ATMs in secure locations, verify machine authenticity, protect your private keys, and be aware of transaction fees. While unregulated, they provide practical on-ramp solutions for crypto adoption in the region.

How can ordinary users in Kenya legally purchase and hold Bitcoin?

Kenyan users can buy Bitcoin through peer-to-peer transactions, Bitcoin ATMs already operational in the country, and over-the-counter dealers. Hold Bitcoin securely using hardware wallets or reputable digital wallets. Ensure compliance with local regulations and KYC requirements when transacting.

How will Kenya's cryptocurrency regulation develop in the future? Does the government plan to issue licenses?

Kenya's regulatory framework is evolving. While crypto firms aren't licensed yet, the government is actively developing guidelines through the Central Bank and regulators. Bitcoin ATMs already operate, signaling gradual acceptance. License issuance is likely forthcoming as regulatory clarity improves.

Compared to other African countries, how is Kenya's attitude towards cryptocurrency?

Kenya maintains a relatively progressive stance on crypto among African nations. While lacking formal licensing framework for crypto firms, Kenya permits Bitcoin ATMs and shows openness to blockchain innovation. This balanced approach—cautious regulation without outright bans—positions Kenya ahead of many African peers in practical crypto adoption.