VASPA Submits Further Response to SEC Nigeria, Focusing on Fees and Registration Gateways for Virtual Asset Service Providers
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How VASPA Shapes Practical Regulatory Outcomes and Pan-African Collaboration: Kenya in Focus
Author
VASPA Admin
Post Date
July 31, 2026
VASPA's Impactful Contribution and Pan-African Collaboration in the Review of Kenya's Final and Gazetted Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134) represent a milestone that VASPA is proud of and look forward to more impacts across Africa.
VASPA’s mission is clear: to bridge the gap between virtual asset innovation and regulatory governance in Africa through proactive advocacy, intelligence, and constructive regulatory dialogue.
Regulatory clarity should not come at the cost of market stifling, nor should market growth bypass consumer protection and financial stability. By deploying evidence-based analysis, industry intelligence, and practical operator perspectives, the Virtual Asset Service Providers Association (VASPA) actively shapes virtual asset frameworks across the continent.
The enactment of Kenya’s final Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134) serves as a landmark demonstration of how VASPA’s policy intervention moves directly from consultation papers into binding law and regulations.
Flagship Impact: Shaping Kenya’s VASP Regulations 2026
In April 2026, VASPA submitted a comprehensive 36-point commentary on Kenya’s proposed draft VASP Regulations to the National Treasury, the Central Bank of Kenya (CBK), and the Capital Markets Authority (CMA). When the final Regulations were gazetted in July 2026, several of VASPA’s key recommendations were adopted, fundamentally improving the operational viability of Kenya’s virtual asset ecosystem.
1. Removing Prohibitive Entry Barriers for African Innovators
- The Challenge: Draft capital thresholds—such as KShs 200,000,000 for tokenization and ICO platforms, and KShs 500,000,000 for stablecoin issuers—risk pushing African-founded startups into informal or unsupervised channels due to excessive fixed costs.
- VASPA’s Intervention: VASPA advocated for proportionality, illustrating that upper-end thresholds were disconnected from international comparators like MiCA, Singapore’s MAS, and Dubai’s VARA.
- The Policy Outcome: The authorities scaled back paid-up capital requirements across nearly every license category in the Fifth Schedule:
- Real-World Asset Tokenization: Reduced from KShs 200M to KShs 10M (a 95% reduction).
- ICO Providers & Token Issuance Platforms: Reduced from KShs 200M to KShs 20M (a 90% reduction).
- Payment Processors: Reduced from KShs 50M to KShs 10M (an 80% reduction).
- Stablecoin Issuers: Reduced from KShs 500M to KShs 300M (a 40% reduction).
- Investment Advisers: Reduced from KShs 2.5M to NIL.
2. Fair Capital Scaling for Multi-Service Licensees
- The Challenge: Draft rules required multi-service operators to hold 100% of the prescribed capital cumulatively for each activity, resulting in severe capital inefficiency.
- The Policy Outcome: Regulation 85(6) now codifies a proportional discount structure: multi-service providers hold the paid-up capital of their highest-capital category plus 50% for each additional activity, eliminating unfair capital drag while maintaining risk resilience.
3. Elevating Consumer Protection and Transparency Standards
- Mandatory Disclosure on ICO Promoter Changes: VASPA identified that a mid-offering change of promoter could leave subscribers uninformed. Regulation 58(5) adopted VASPA’s draft text, making it mandatory to disclose incoming promoter details, background, and withdrawal rights to consumers within five working days.
- Outcome Tracking in Public Registers: VASPA recommended expanding the ICO register beyond administrative details. Regulation 59 now tracks whether minimum subscription targets were met, token listing dates, and reasons for any failed offerings.
- Accelerated Complaint Resolutions: VASPA raised concerns over a provision that allowed firms up to three months to update consumers on complaint progress. Regulation 110(2)(d)(iii) reduced this window to a maximum of 21 days.
- Influencer & Social Media Transparency: Recognizing social media as a primary vector for retail exploitation, VASPA called for explicit influencer promotion rules. Regulation 130(1)(c) mandates explicit disclosures whenever third parties or influencers are compensated to feature virtual asset products.
4. Resolving Foreign-Currency Stablecoin Risks
- The Challenge: Requiring 70% of non-bank reserve assets to be invested strictly in domestic Kenyan assets created severe currency mismatch risks for foreign-currency (e.g., USD-pegged) stablecoins.
- The Policy Outcome: Regulation 77(1)(c) explicitly mandates that reserve assets for fiat-referenced stablecoins must be denominated in the official currency referenced by the peg, protecting issuers and consumers from unintended de-pegging risks.
Key Highlights of Regulatory Changes Shaped by VASPA
Regulatory Domain | Initial Draft Provision | VASPA Recommendation | Final Gazetted Standard (2026) |
Tokenization Capital | KShs 200,000,000 | Introduce proportionality to support local innovators | KShs 10,000,000 (Fifth Schedule) |
Multi-Service Capital | 100% full addition per activity | Consolidated capital pooling mechanics | Highest Category + 50% per extra activity (Reg 85(6)) |
ICO Promoter Change | Regulator notification only | Mandatory subscriber notification & withdrawal rights | 5-day mandatory consumer disclosure (Reg 58(5)) |
ICO Register Scope | Basic administrative entries | Record offering outcomes, listing dates & failures | Includes subscription success & failure data (Reg 59) |
Stablecoin Reserve Assets | 70% domestic asset investment required | Align reserve denomination with referenced peg currency | Reserve currency must match peg currency (Reg 77(1)(c)) |
Complaint Handling | 3-month progress notification | Shorten progress reporting window | Max 21-day progress disclosure (Reg 110(2)(d)(iii)) |
Cyber Incident Reporting | Undefined 24-hour reporting | Two-stage reporting: immediate alert + 5-day root report | 24-hr alert + 5-day detailed report (Reg 99) |
Consistent with our mandate, VASPA will continue to track policy and regulatory developments as well as implementation and regulatory supervision in Kenya. This is to ensure continual improvement of the East African country’s virtual asset landscape. In collaboration with all stakeholders in Kenya, it is vital that we continue to improve rails that help Africa build trust and confidence in this emerging sector.
Franklin Peters, the Executive Chair of VASPA and Founder & CEO OF Boundlesspay, expressed his delight with the development in Kenya’s regulatory landscape for Virtual assets:
“The gazetting of Kenya’s Virtual Asset Service Providers Regulations, 2026 represents a landmark achievement not just for Kenya, but for the entire continent. It clearly demonstrates that when regulatory authorities and industry practitioners engage in constructive, intelligence-driven dialogue, we can establish frameworks that rigorously safeguard market integrity without locking out African innovation.
On behalf of VASPA, I want to express our deep appreciation to the National Treasury, the Central Bank of Kenya, and the Capital Markets Authority for their consultative approach and progressive regulatory vision. This outcome validates VASPA’s core mission—to bridge the gap between innovation and policy through proactive, practical advocacy. As Africa accelerates toward a unified digital economy, VASPA remains fully committed to partnering with regulators across the continent to build harmonized, secure, and business-friendly digital asset ecosystems.”
— Franklin Peters, Executive Chair, Virtual Asset Service Providers Association (VASPA)
Why African Regulators (Should) Partner with VASPA
As African nations move to formalize their digital asset landscapes, regulators face a dual imperative: protecting sovereign financial systems from contagion while positioning their jurisdictions to lead in cross-border trade, financial inclusion, and capital attraction.
VASPA offers national and regional supervisory authorities a collaborative partnership model:
- Deep Technical Subject-Matter Expertise: Virtual assets move faster than conventional financial instruments. VASPA brings direct technical knowledge in smart contract audits, distributed ledger protocols, real-world asset tokenization mechanics, and stablecoin reserve management.
- Cross-Border Regulatory Harmonization: As the African Continental Free Trade Area (AfCFTA) matures, fragmented digital asset rules threaten intra-African trade. VASPA, as a pan-African advocacy, is positioned to work with regional bodies to harmonize definitions, licensing requirements, and supervisory approaches, mitigating regulatory arbitrage.
- Structured Industry Consultation: VASPA acts as a single, accountable umbrella association representing responsible industry participants—simplifying public-private consultations and policy feedback loops.
- Capacity Building & Regulatory Intelligence: As part of its constitutional mandate, VASPA conducts specialized technical workshops, supervisory toolkits, and policy briefings for central banks, securities regulators, law enforcement agencies, and financial intelligence units across Africa.
Vote of Thanks
The Executive Council, led by President Franklin Peters, together with the Board of Advisers and the Board of Trustees, expresses its profound gratitude to the Cabinet Secretary for National Treasury and Economic Planning, the Central Bank of Kenya (CBK), and the Capital Markets Authority (CMA) for their thoughtful consideration of VASPA’s recommendations in shaping the Virtual Asset Service Providers Regulations, 2026.
We also extend our profound gratitude to the Policy & Regulations Unit for its outstanding work on this initiative. We specifically commend Favour Uche, Assistant Lead of the Policy & Regulations Committee—who has in fact stepped into the capacity of the acting lead since April 2026—for her dedicated stewardship of the Unit. We also express our sincere appreciation to all VASPA members for their unwavering support.
VASPA remains committed to working alongside regulatory authorities, central banks, and market participants across the continent. By fostering transparent regulatory frameworks that balance risk mitigation with business growth, VASPA is establishing Africa as a global standard-bearer for digital asset governance and responsible financial technology.
A full copy of VASPA’s 65-page regulatory commentary submission is available upon formal written request to registered members and strategic partners of the Association.
About VASPA
The Virtual Asset Service Providers Association (VASPA) is a Pan-African industry body registered as an Incorporated Trustee with the Corporate Affairs Commission in Nigeria (CAC IT: 79069970) where it is headquartered. VASPA comprises individual, corporate, and institutional members from across Africa. For more information about us, please visit our website, www.vaspa.org. To become a Patron or Partner of VASPA, visit our Membership page: https://vaspa.org/become-a-member/. Individual and corporate members are also welcomed.
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