Kenya's proposed law requires digital asset companies to establish local offices

ChainCatcher news, according to Bloomberg, the Kenyan government is drafting a law that requires virtual asset service providers to establish local offices to strengthen regulation of the rapidly growing digital asset industry.

The proposed policy does not apply to assets that cannot be transferred, traded, or used for payment and investment outside a closed ecosystem, and aims to address the gaps in the legal and regulatory framework in the virtual asset sector, as well as issues related to consumer protection, governance, data privacy, and cybersecurity.

Kenya introduced a 3% tax on digital asset trading income in 2023, but has yet to establish a comprehensive regulatory framework for the industry. The government hopes to fill the regulatory gap with this move while addressing industry risks such as money laundering, terrorist financing, tax evasion, fraud, and cybercrime.