The Capital Markets Authority wants eyes on every blockchain transaction flowing through Kenya’s virtual asset market.
The regulator has issued a tender to procure and deploy a Virtual Assets Blockchain Analytics System, a tool meant to give supervisors real time visibility into wallets, exchanges, and the trading platforms that move digital assets across borders.
Why the Authority Needs This Now
Kenya’s appetite for cryptocurrency and blockchain based finance has grown faster than the rules meant to govern it. That gap has opened the door to money laundering, terrorism financing, fraud, market manipulation, sanctions evasion, tax evasion, and scams that ride on new technology, according to the tender documents. Cross border illicit flows add another layer of risk, one that threatens both market integrity and investor confidence.
The timing lines up with a bigger shift in Kenyan law. The Virtual Assets Service Providers Act, 2025 was gazetted on October 21, 2025, and took effect on November 4, 2025, establishing the legal framework for regulating and supervising virtual asset service providers. The Central Bank of Kenya and the Capital Markets Authority now share supervisory duties under that law, splitting oversight by activity rather than creating a single dedicated crypto regulator, as had once been proposed. Trading platforms and exchanges fall under the CMA’s watch, while the Central Bank handles stablecoins and related payment functions.
The Authority already holds licensing power over virtual asset service providers such as exchanges, brokers, asset managers, and investment advisers. What it lacks is the technical capacity to see what happens inside those platforms once they go live. The analytics system is meant to close that gap, giving the Authority intelligence led oversight rather than paperwork based supervision.
What the System Must Do
The tender lays out two core functions: transaction monitoring and investigation support.
On monitoring, the system needs to track blockchain activity, wallets, and counterparties in real time and pull historical records on demand. It must flag suspicious transactions as they happen, catching high risk wallets, large asset movements, links to sanctioned entities, exposure to darknet services, unusual transaction speed, and signs of structuring or smurfing, where large sums get broken into smaller transfers to dodge scrutiny. Investigators should also be able to tag specific wallets or entities for automatic alerts the moment they show new activity, and the platform needs configurable thresholds and risk models so the Authority can tune its own alert rules rather than rely on fixed settings.
Investigation tools go further, turning raw blockchain data into something a human analyst can actually use. The system must map relationships between wallets and entities as visual graphs, reconstruct events in chronological order through timeline analysis, and trace how a specific digital asset moved from one wallet to another across a chain of transactions. It also needs hop analysis, which counts the intermediary steps between a source and destination wallet, plus fund flow visualization that shows how assets travel across platforms over time.
Together, these functions turn scattered blockchain data into evidence investigators can present, act on, or hand to law enforcement.
What This Means for the Market
For licensed and prospective virtual asset service providers, the message is direct: assume the regulator can see what happens on chain, not just what appears in compliance reports. The Authority has said no virtual asset service providers have been licensed to operate in or from Kenya yet, even though the legal groundwork is in place, and detailed regulations to guide implementation are still being drafted by the National Treasury with input from both regulators.
That leaves a window before enforcement ramps up, one that firms hoping to enter Kenya’s market would do well to use. Building anti money laundering systems capable of chain analysis and wallet clustering now will matter more once licensing opens and the Authority’s new monitoring system goes live. Kenya is positioning itself among a small group of African markets, alongside Mauritius and South Africa, moving to regulate digital assets with real technical teeth rather than rules on paper alone.
