Kenya’s Capital Markets Authority is moving to acquire a blockchain surveillance system — a step that signals just how seriously the country’s regulators are taking their new crypto framework. With more than six million Kenyans already using digital assets and roughly $19 billion in crypto flowing into the country between July 2024 and June 2025, the pressure to build real enforcement infrastructure is no longer theoretical. Kenya crypto regulation has entered a new, more operational phase.
Summary
Key takeaways
- Kenya’s Capital Markets Authority is seeking to purchase a blockchain surveillance tool to monitor virtual asset activity and enforce its new regulatory framework.
- The Virtual Assets Service Providers Act, signed by President William Ruto in October, gives Kenya its first comprehensive crypto law — splitting oversight between the Central Bank of Kenya and the Capital Markets Authority.
- No crypto firms have been licensed yet under the new law; existing operators have until November 2026 to comply.
- Kenya received about $19 billion in crypto between July 2024 and June 2025, making it the fourth largest crypto market in Africa.
- The surveillance platform would generate automated alerts on high-risk wallets, suspicious transactions, coin mixers, darknet-linked addresses, and sanctioned entities.
Kenya’s New Crypto Regulatory Framework
The push for surveillance technology did not come out of nowhere. It follows directly from the Virtual Assets Service Providers Act that President William Ruto signed into law in October, giving Kenya its first structured legal framework for digital assets. The law took effect in November and brought years of informal market growth under formal regulatory scope for the first time.
Virtual Assets Service Providers Act Overview
The law fills a gap that had allowed Kenya’s crypto market to expand rapidly with little oversight. Draft regulations were published by the National Treasury in March, but no firms have been licensed yet under the new framework. Existing virtual asset operators have until November 2026 to meet licensing requirements — a window that gives the market time to adapt, but also one that regulators clearly intend to use to build their monitoring infrastructure before the deadline arrives.
The broader goal is alignment with anti-money laundering standards set by the Financial Action Task Force, the global body that sets the benchmark for how countries handle financial crime risks tied to crypto.
Regulatory Division Between the Central Bank and the Capital Markets Authority
One of the law’s defining features is how it divides responsibility. The Central Bank of Kenya takes charge of payments, stablecoins, and custodial wallets — the transactional infrastructure side of the market. The Capital Markets Authority, meanwhile, oversees exchanges, brokers, investment advisers, and tokenization platforms — the investment and trading layer. It is the CMA, operating in that second category, that is now seeking the blockchain intelligence tool.
This split reflects how regulators globally are grappling with crypto’s dual nature: part financial infrastructure, part investment market. Getting that division right matters — not just procedurally, but because it determines which regulator chases down which type of violation.
Blockchain Surveillance System to Monitor Crypto Activities
The CMA’s decision to seek dedicated blockchain intelligence software is the practical translation of regulatory ambition into enforcement capacity. Without tools designed specifically for on-chain analysis, a crypto oversight framework is largely aspirational.
Purpose and Features of the Surveillance Tool
The platform the CMA is seeking would do several things at once. It would generate automated alerts for high-risk wallets, large transfers, coin mixers, and darknet-linked addresses, and screen transactions against United Nations and U.S. Office of Foreign Assets Control sanctions lists. Beyond flagging individual transactions, the system would map relationships between wallets, reconstruct transaction timelines, trace funds across multiple chains, and assign risk scores tied to money laundering, ransomware, fraud, and terrorism financing.
Critically, the regulator also wants the tool to identify which exchanges are most popular among Kenyan users — and to detect unlicensed offshore platforms serving the local market without authorization. That last capability matters enormously. Much of Kenya’s crypto activity runs through informal peer-to-peer channels and platforms that operate outside any local licensing regime. Surveillance software that can surface those connections gives regulators a map of the market they are trying to govern.
Global Context and Similar Tools Used Elsewhere
Kenya would not be the first government to lean on this type of technology. In the United States, Immigration and Customs Enforcement moved to acquire forensics software from both TRM Labs and Chainalysis — firms that already hold contracts with the FBI, the DEA, and the IRS. In the United Kingdom, HMRC has brought on TRM Labs to trace suspect transactions. The capabilities the CMA is describing closely mirror the product sets offered by blockchain intelligence firms like Chainalysis, TRM Labs, and Elliptic, which sell comparable software to governments and regulators worldwide.
What makes Kenya’s move analytically interesting is the timing. The country is still in the pre-licensing phase of its regulatory rollout — no firms are authorized yet, compliance deadlines are more than a year away, and draft rules only landed a few months ago. Deploying surveillance infrastructure now, before the market is formally licensed, suggests the CMA intends to build a real-time picture of on-chain activity as the licensing window plays out. That is a more proactive posture than many emerging market regulators have taken.
Kenya’s Crypto Market Landscape
The scale of Kenya’s crypto market helps explain why the regulatory stakes are high. According to Chainalysis, Kenyan residents received about $19 billion in crypto between July 2024 and June 2025, ranking the country fourth on the African continent by crypto received. That is a meaningful market — one large enough that gaps in oversight carry real financial crime risk.
Market Size and User Base
More than six million Kenyans are estimated to use digital assets. That user base is not a niche. It represents a significant slice of the population, and it has grown largely through informal channels rather than licensed, regulated platforms. The sheer number of active users means that whatever regulatory model Kenya builds will affect a substantial portion of the country’s financial activity.
Peer-to-Peer Trading and Informal Channels
Much of Kenya’s crypto usage runs through peer-to-peer channels — direct trades between individuals that leave a lighter footprint on any centralized platform’s records. That dynamic is precisely where blockchain surveillance tools are designed to add value. On-chain analysis does not depend on a platform’s compliance records; it reads the blockchain directly. For a market shaped as much by P2P trading as Kenya’s is, that distinction is the difference between visibility and blind spots.
The combination of a large informal market, a fast-approaching licensing deadline, and newly enacted legislation gives Kenya’s regulatory push an urgency that goes beyond paperwork. How effectively the CMA can use blockchain intelligence tools to identify unregistered operators — offshore and domestic — before November 2026 will largely determine whether the Virtual Assets Service Providers Act becomes a functioning framework or a set of rules that the market routes around.
FAQ
What is the purpose of Kenya’s blockchain surveillance system?
The system aims to help police the growing crypto market by generating automated alerts for high-risk wallets, suspicious transactions, coin mixers, darknet-linked addresses, and sanctioned entities. It would also help identify the exchanges most used by Kenyans and detect unlicensed offshore platforms serving the local market.
Who regulates crypto activities under Kenya’s new law?
The Central Bank of Kenya oversees payments, stablecoins, and custodial wallets, while the Capital Markets Authority regulates exchanges, brokers, investment advisers, and tokenization platforms.
Have any crypto firms been licensed under Kenya’s new Virtual Assets Service Providers Act?
No crypto firms have been licensed yet under the new law. The National Treasury published draft regulations in March, and existing operators have until November 2026 to comply with licensing requirements.
How large is the crypto user base in Kenya?
More than six million Kenyans use digital assets, mostly via peer-to-peer channels. According to Chainalysis, Kenyan residents received about $19 billion in crypto between July 2024 and June 2025, making Kenya the fourth largest crypto market in Africa.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
