KENYA Law and Practice Contributed by: Keega Gakuua, Faith Njeri Njaggah and Alphonse Odido, Keega & Company Advocates
vices licensing regime, enforced by the CMA and the CBK. Marketing communications must be fair, clear, not misleading, and presented in plain language. These rules apply to any person or entity offering virtual asset services “in or from Kenya”, defined broadly as deriving economic benefit from the country irrespec- tive of physical presence. Advertising is defined widely to include websites, social media, email campaigns, seminars, and recorded presentations. Key restrictions and requirements include: • prior approval for token offerings, requiring a “no objection” notice from the regulator before any marketing campaign may commence; • a licensing requirement, meaning only licensed VASPs may advertise their services; • content and disclosure rules, requiring clear dis- closure of fees, withdrawal conditions, and risks, with risk warnings prohibited from being hidden in fine print, margins, or behind links, and a ban on misleading advertisements or promises of guaran- teed profits; and • third-party liability, meaning promotions by influ- encers or third-party marketers are subject to the same rules and penalties. Separately, the Consumer Protection Act, 2012 estab- lishes a baseline for all advertising, prohibiting false or misleading representations about goods or services. 4.2 White Labelling There is no explicit statutory or regulatory “white-label agent” model under the current VASP framework, meaning an unlicensed foreign firm cannot simply re- brand a local VASP’s licence and legally offer its own branded products to Kenyan users without acquiring authorisation or a clearly sanctioned agency arrange- ment approved by the regulators. That said, two limited structures can emulate a white- label-like outcome under strict regulatory constraints. First, an external firm may operate as an agent or sales channel of a licensed VASP, with the licence holder remaining the regulated party responsible for compli- ance, AML/CFT, and conduct obligations, provided
the arrangement is approved by the CMA or CBK. Second, an external firm can license technology or infrastructure from a licensed VASP, but to the extent it “sells into Kenya”, the local-facing entity must either be itself licensed as a VASP in Kenya or operate under a regulated payment or banking licence partner that wraps the crypto-enabled service into its own author- ised product.
5. Decentralised Finance 5.1 Ability to Use DeFi
The VASP Act, 2025 and its implementing regulations do not contemplate decentralised finance (DeFi) as a regulatory category. The framework is designed for centralised, licensed entities with legal personal- ity, identifiable management, a physical presence in Kenya, and the ability to comply with prudential, gov- ernance and AML/CFT obligations. The VASP Act, 2025 and its implementing regula- tions do not expressly address whether CeFi firms may utilise DeFi protocols in connection with provid- ing products and services into Kenya. There is no specific prohibition on CeFi–DeFi integration, nor is there explicit permission or dedicated guidance. The practical implication is a de facto prohibition on CeFi firms using DeFi in connection with serving Kenyan users, as doing so would place the licensed firm in breach of regulatory requirements to deal exclusively with authorised persons. 5.2 DeFi Structures The VASP Act establishes a comprehensive licensing regime for all virtual asset activities. Critically, it man- dates that only a “company limited by shares” incor- porated under the Kenyan Companies Act (Cap 486) can be licensed to operate as a VASP. This implies that the regulatory framework is purpose-built for cen- tralised, accountable entities with identifiable human controllers. This legal requirement immediately dis- qualifies a decentralised autonomous organisation (DAO), which lacks a defined legal personality under Kenyan law. Consequently, it is legally impossible for a DAO to obtain the licence required to offer DeFi ser- vices to the public in or from Kenya.
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