Navigating the digital currency legal framework, as revolution continues to gather momentum.
Africa’s digital currency revolution is gathering momentum, and Kenya sits at the heart of it. As blockchain, tokenization, and stable coin projects expand, lawyers in Kenya are being called to navigate a rapidly shifting regulatory and economic landscape. The conversation is no longer about if regulation will come, but how it will be shaped and whether Kenya’s legal system is prepared to respond with clarity, foresight, and balance.
“If crypto succeeds, it's not because it empowers better people. It's because it empowers better institutions." - Vitalik Buterin, Co-Founder of Ethereum
Global Inspiration: The U.S. GENIUS Act and Beyond
The recent U.S. GENIUS Act signals a new chapter in global digital currency regulation. By classifying and supervising digital assets under a hybrid governance model that recognizes their unique qualities neither pure securities nor commodities the Act provides a framework for innovation while managing systemic risks. For Kenya, which has yet to legislate a comprehensive digital asset framework, this development offers both a benchmark and a cautionary tale. The country must design rules that foster innovation while protecting investors and safeguarding against abuse.
Kenyan Legal Trends and Case Law
Kenyan courts have already begun encountering disputes at the intersection of finance, technology, and law, even without explicit crypto legislation. Two recent cases illustrate how existing laws are being stretched to cover digital asset issues: Assets Recovery Agency v Virtual Financials International Ltd [2024] KEHC 9225 The High Court approved the forfeiture of assets under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA). While the case did not involve cryptocurrencies directly, it set a precedent that asset seizure and forfeiture powers could extend to digital assets if deemed proceeds of crime. The World coin Biometric Data Case [2025] KEHC 5629 here, petitioners challenged the global crypto identity project World coin for breaches of the Data Protection Act, 2019, citing unlawful collection of biometric data. The case underscores how compliance with privacy and data protection laws is critical for crypto platforms operating in Kenya.
These cases demonstrate that Kenyan courts are ready to apply existing statutes POCAMLA, data protection, consumer protection, and even competition law to crypto activities. Until dedicated legislation is passed, this “patchwork approach” will likely dominate.
Securitization vs Stable coins: Untangling the Debate
Globally, the classification of stable coins remains contested. While some regulators push to treat them as securities, others view them as commodities. In truth, stable coins are hybrid financial instruments, pegged to fiat currency but circulating in a digital ecosystem. Treating them as securitized products risks stifling innovation, while ignoring them entirely creates systemic risk. Kenya must strike a balance recognizing that stable coins are neither securities nor commodities in the traditional sense, but a new category requiring its own framework.
Enforcement and Asset Freezes
As seen in the Virtual Financials case, asset forfeiture laws are potent tools. The possibility of “seize or freeze” orders on digital wallets is very real, particularly where crypto assets are linked to fraud or money laundering. Reciprocal enforcement agreements between Kenya and jurisdictions with mature crypto laws could add further complexity allowing, for example, a U.S. or EU freeze order to be recognized by Kenyan courts.
The Way Forward for Kenya
The economic implications are enormous. For youth and retail traders, regulatory clarity would reduce exploitation and fraud. For institutional investors, it would unlock opportunities in tokenized real estate, cross-border remittances, and digital asset funds. And for government, a sound framework means tax revenue, AML compliance, and stronger participation in the global digital economy.
Lawyers are at the center of this evolution interpreting old laws to fit new realities, shaping compliance frameworks, and advising innovators. As Kenya positions itself within Africa’s digital currency revolution, the legal fraternity must embrace a role of strategic thought leadership, ensuring the law is not just a brake but a catalyst for innovation.
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