Kenya's New Crypto Rules Give Authorities Power to Seize Digital Assets

Kenya has introduced new cryptocurrency regulations that allow authorities to seize digital assets. The Virtual Asset Service Providers (VASP) Regulations, 2026, were gazetted on July 24 and empower investigators to freeze and seize virtual assets linked to fraud, money laundering, corruption, and terrorism financing investigations.

The regulations give authorities the power to seize devices, seed phrases, and hardware wallets that unlock digital assets. This includes the ability to convert frozen virtual assets into fiat currency to preserve their value during an investigation.

The new framework applies to any provider operating 'in or from Kenya,' which includes platforms that actively solicit or target Kenyan users or earn income from Kenya. Failure to comply with a freezing or seizure order is a criminal offense, punishable by fines of up to KES 5 million ($38,640) and up to five years in prison.