Why global cooperation is crucial for regulation of Kenya's virtual assets

Virtual assets, including cryptocurrencies such as Bitcoin, stablecoins and Non-Fungible Tokens (NFTs), are digital representations of value that can be traded, transferred or used for payment or investment. Virtual Asset Service Providers (VASPs) support this ecosystem by offering exchange, custody, brokerage and transfer services. Virtual assets have become an increasingly significant part of the global financial system, with cryptocurrency activity expanding across developed and emerging markets. According to Chainalysis' 2025 Geography of Cryptocurrency Report, Sub-Saharan Africa received more than $205 billion in on-chain cryptocurrency value between July 2024 and June 2025, making it the world's third-fastest-growing crypto region. Kenya ranks among the region's top five cryptocurrency markets by on-chain value received, driven by retail adoption, mobile-money integration and demand for cross-border payment alternatives. As adoption grows, so do the risks of fraud, market abuse and money laundering, often involving perpetrators, victims and assets spread across multiple jurisdictions. Virtual assets operate on decentralised and borderless networks that allow pseudonymous transactions and the rapid cross-border movement of assets. These conditions inherently constrain any single regulator from effectively discharging its enforcement mandate where misconduct transcends national borders and requires coordinated regulatory intervention. Effective virtual asset regulation thus depends not only on robust domestic laws but also on timely cooperation between regulators across jurisdictions. Recent cases bear out both the transnational character of virtual asset misconduct and the growing willingness of regulators to coordinate their responses across borders. The collapse of FTX in 2022 prompted securities and financial regulators in at least five countries to act simultaneously, with the United States SEC and Commodity Futures Trading Commission (CFTC), the Securities Commission of the Bahamas, the Australian Securities and Investments Commission and the Cyprus Securities and Exchange Commission each launching separate enforcement responses, underscoring how a single platform failure can engage multiple regulatory authorities across different jurisdictions at once. In 2023, Binance agreed to a $4.3 billion settlement with the US Department of Justice while regulators including the UK's Financial Conduct Authority and Japan's Financial Services Agency also took action against the exchange, underscoring the complexity of supervising global virtual asset platforms. Closer to home, the Mirror Trading International fraud in South Africa prompted action by the country's Financial Sector Conduct Authority and the US's CFTC, illustrating how even locally orchestrated crypto fraud can require cross-border regulatory and enforcement cooperation. While virtual assets have heightened the need for cross-border cooperation, international regulatory collaboration is by no means new, having long been anchored in the International Organisation of Securities Commissions' (IOSCO) Multilateral Memorandum of Understanding (MMoU). More recently, IOSCO introduced the Enhanced Memorandum of Understanding (EMMoU) to provide a stronger framework for cross-border information sharing and regulatory cooperation among securities regulators. The EMMoU expands regulators' access to critical cross-border information including beneficial ownership data, banking and transaction records, internet subscriber data, audit work papers and witness evidence, tools especially critical for virtual asset enforcement where tracing ownership, identifying controlling persons, following transaction flows and obtaining records held abroad are central to effective action. Kenya's accession to the EMMoU on May 14, 2025 marked a significant milestone, signalling commitment to international regulatory standards in an era of increasingly transnational virtual asset activity. This international commitment has been complemented by domestic reforms. The 2022 ESAAMLG Mutual Evaluation Report recommended that Kenya establish a formal regulatory framework for VASPs, while the 2023 Virtual Assets andVASPs Money Laundering and Terrorism Financing National Risk Assessment Report underscored that the cross-border nature of virtual assets compounds money laundering and terrorism financing risks. These developments, together with the AML/CFT deficiencies that contributed to Kenya's placement on the FATF grey list in February 2024, provided further impetus for action. Kenya responded by enacting the Virtual Asset Service Providers Act in October 2025, establishing its first comprehensive legal framework for VASPs and bringing its regulatory architecture closer to international standards. The Act adopts a dual regulatory model, with the Central Bank of Kenya overseeing payment and stablecoin activities and the Capital Markets Authority supervising investment and trading-related virtual asset services. Later, the Virtual Asset Service Providers Regulation of 2026 which operationalize the VASP Act, were promulgated on July 22, 2026. EMMoU membership sits at the intersection of these domestic and international threads. As virtual asset transactions cut across borders, the capacity of Kenyan regulators to seek and provide cross-border assistance is no longer optional. It is essential. Domestic regulation alone cannot address the challenges of a globally interconnected marketplace. The rise of virtual assets has transformed securities enforcement from a domestic exercise into a transnational enterprise. International cooperation is no longer supplementary to effective regulation. It is becoming a foundational pillar.