KENYA Law and Practice Contributed by: Keega Gakuua, Faith Njeri Njaggah and Alphonse Odido, Keega & Company Advocates
of KES100 million or 100% of current liabilities for at least 30 days, whichever is higher. ICO providers, tokenisation providers, and token issuance platforms ICO providers, tokenisation providers, and token issuance platforms each require paid-up capital of KES200 million and liquid capital of KES40 million or 8% of total liabilities, whichever is higher. Virtual asset exchanges and wallet providers Virtual asset exchanges and wallet providers each require paid-up capital of KES150 million, with exchanges requiring liquid net worth equal to 50% of estimated gross operating costs for the next 12 months, and wallet providers requiring liquid capital of KES30 million or 100% of current liabilities for at least 30 days, whichever is higher. Virtual asset payment processors require paid-up capital of KES50 million and liquid capital of KES10 million or 20% of paid-up capital, whichever is higher. Virtual asset brokers and managers Virtual asset brokers and managers each require paid- up capital of KES30 million and liquid capital of KES6 million or 8% of total liabilities, whichever is higher. Virtual asset investment advisers Virtual asset investment advisers have the lowest threshold, with paid-up capital of KES2.5 million and liquid capital of KES1 million or 8% of total liabilities, whichever is higher. 3.3 Change of Control All VASPs are required to notify the relevant regula- tory authority of any material change to the business; a term defined to include a merger with or acquisition of another legal person and the sale of a subsidiary or acquisition of a controlling interest in another entity. The Act prohibits any person from acquiring or dis- posing of shares, or otherwise causing a change in control, without prior regulatory consent. Specific Triggers Requiring Pre‑Approval The following transactions require formal regulatory approval before completion:
• any change in shareholding of the VASP – irrespec- tive of whether it results in a change of control; • issuance of new shares that could alter control dynamics; • acquisition of a controlling interest in a VASP or in another entity by a VASP; • merger with or acquisition of another legal person by a VASP; and • sale of a subsidiary where the VASP is either the buyer or the target. The detailed approval timelines, fees, and procedural requirements will be published in subsidiary regula- tions once finalised by the CBK and CMA. Vetting of Acquirers: The “Fit and Proper” Test Any person acquiring a controlling interest in a licensed VASP will be subject to the same “fit and proper” test that applies to initial licence applicants. The regulator assesses: • competence – relevant qualifications, experience in virtual assets or financial services; • probity – clean criminal record, absence of regula- tory sanctions, financial integrity; and • financial soundness – source-of-funds verification, ability to support the VASP’s capital requirements. For CBK‑regulated entities (wallets, payment proces- sors, stablecoin issuers), additional scrutiny may apply to ensure the acquirer does not jeopardise financial stability or payment system integrity. Licence Non‑Transferability VASP licences are not transferable, except with prior written regulatory approval. Any change in the legal or beneficial ownership of the licensed entity effectively requires the regulator to re‑assess the licence holder’s eligibility. 3.4 Passporting Kenya’s VASP licences are territorially restricted to Kenya and cannot be automatically passported into other jurisdictions. The Act does not provide for mutu- al recognition of licences or any mechanism allowing a Kenyan VASP licence to grant easier access to foreign markets without additional local authorisation.
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