Kenya seeks blockchain surveillance to police new crypto market

The proposed system will conduct both real-time and retrospective analysis, flagging high-risk activity such as coin mixing, darknet associations, and transfers linked to entities on UN or U.S. sanctions lists. By mapping wallet relationships and rebuilding transaction histories, the regulator intends to assign risk scores for money laundering, terrorism financing, and fraud. The tender specifications demand broad compatibility, covering Bitcoin, Ethereum, and numerous other chains to ensure comprehensive oversight of the domestic market.

This initiative follows the enactment of the Virtual Assets Service Providers Act, signed by President William Ruto in October. While the law is active, the licensing process remains in its infancy; no firms have secured approval yet, and current operators face a November 2026 deadline to align with new compliance standards. With over six million users and $19 billion in crypto inflows recorded between mid-2024 and mid-2025, Kenya ranks as one of Africa’s most active digital asset hubs. The regulator’s move mirrors strategies employed by tax and law enforcement agencies in the United States and the United Kingdom, which rely on commercial intelligence providers to trace funds and enforce international anti-money laundering protocols.