Kenya Gives Crypto Firms Right to Appeal Regulatory Decisions

Kenya has finalized its cryptocurrency regulations, giving licensed crypto exchanges and virtual asset companies the right to appeal regulatory decisions. The Virtual Asset Service Providers (VASP) Regulations now allow exchanges, wallet providers, token issuance platforms, stablecoin issuers, and other virtual asset firms to challenge licence refusals, suspensions, revocations, and other regulatory sanctions imposed by authorities.

The regulations also expand the government's enforcement powers, allowing regulators to reject licence applications, suspend or revoke licences, impose administrative sanctions, intervene in the management of a provider, and appoint statutory managers to take control of customer assets under specified circumstances. Additionally, investigators may obtain access to hardware wallets, seed phrases, and other devices necessary to secure digital assets under investigation.

The appeals mechanism is particularly significant as it provides a clear procedural safeguard for affected virtual asset service providers. This change marks an important shift from the draft regulations published in March, which did not contain an explicit statutory appeals mechanism for affected virtual asset service providers.