On Wednesday, 4 November 2026, the VASP deadline arrives: the one-year transition period under the Virtual Asset Service Providers Act, 2025 ends. We have spent the last few weeks fielding the same handful of questions from exchanges, wallet businesses and offshore platforms with Kenyan users. Has it been extended? We filed last week, are we covered? What happens to us on Thursday morning?
The short answers are no, probably not, and that depends on what you do in the next two days. The longer answers follow.
Where the deadline comes from
The Act (Act No. 20 of 2025) was assented to on 15 October 2025 and came into force on 4 November 2025. Section 47 is the only transitional provision in it, and it is one sentence long. Anyone already providing virtual asset services when the Act commenced must comply with the Act “within one year of the commencement”.
That sentence does a lot of work. Section 8(2) of the same Act bars any person from carrying on virtual asset business in or from Kenya, or holding itself out as doing so, unless it is licensed by the relevant regulatory authority. Section 47 is what held that prohibition off existing operators for twelve months. On 4 November it stops doing so.
Has the deadline been extended?
As at the date of publication, no. We checked the Act as it currently appears on Kenya Law, which shows no amending legislation, and we found no notice from the Central Bank of Kenya, the Capital Markets Authority or the National Treasury announcing a postponement.
It is also worth understanding why an extension is unlikely to come from the regulators. The one-year period is fixed by section 47 itself. The Cabinet Secretary’s power to make regulations under section 49 is a power to give effect to the Act, not to rewrite a period Parliament set, and neither CBK nor CMA has a statutory power to waive it. A real extension would need an amendment passed by Parliament. With two days left, there is no bill we are aware of that would do it in time.
So plan on the basis that the date holds. If that changes before Wednesday, we will update this article.
Filing is not the same as being licensed
This is the misunderstanding we are most worried about.
Neither the Act nor the Virtual Asset Service Providers Regulations, 2026 (Legal Notice No. 134 of 2026) contains any provision treating an applicant as licensed while its application is pending. We read both instruments looking for one. There is no “deemed licence”, no saving for applications lodged before the deadline, and no transitional part in the Regulations at all. The Act’s own test in section 8(2) is binary: you are licensed, or you are not.
The timing makes this worse. Regulation 6(4) gives the regulator thirty days to decide an application, but the clock only starts once two things have happened: the regulator has received all the documents and information listed in regulation 6(2), and it has completed due diligence on the applicant. Regulation 6(3) also allows the regulator to call you in for an interview, and regulation 10 lets it reject an application if you fail to respond to its requests for clarification. A file lodged in late October will not produce a licence by Wednesday. It may not produce one by Christmas.
None of this makes filing pointless. An operator with a complete application under active review is in a very different position, practically and in the eyes of a regulator deciding where to spend enforcement effort, from one that has done nothing. But that is a matter of discretion, not legal protection. We would not advise any client to treat a pending application as permission to keep trading.
What is actually at stake
Contravening section 8(2) is an offence under section 8(3). The penalty sits in section 40(3): on conviction, a fine of up to KES 10 million or imprisonment for up to five years, or both, for an individual, and a fine of up to KES 25 million for a company.
There is a drafting point here that boards should not misread. Section 41, which makes directors and senior officers personally liable when they knowingly authorise or permit an offence, is written for offences “committed by a licensee”. An unlicensed operator is, by definition, not one. That is not a safe harbour. The general rules on parties to offences in section 20 of the Penal Code still apply to anyone who aids, counsels or procures the commission of an offence, and a director who signs off on continued unlicensed trading after Wednesday is exposed in a way that a narrow reading of section 41 does not remove.
The fine is rarely the biggest cost, though. Banks, payment service providers and custody vendors read the same Act. Expect counterparties to start asking for licence numbers, and expect some of them to suspend services to platforms that cannot produce one.
Who this applies to
Section 47 speaks to persons who were already providing virtual asset services when the Act commenced. If you were not operating in Kenya on 4 November 2025, you never had a transition period; section 8(2) has applied to you from day one, and you need a licence before you start.
The prohibition reaches business carried on “in or from Kenya”. A platform incorporated elsewhere that onboards Kenyan customers, markets to them or settles in shillings should not assume its offshore domicile takes it outside the Act. Whether a particular model is caught turns on facts, and it is a question worth answering properly rather than hopefully.
It also matters which licence you need, because there are two regulators. Under the First Schedule to the Act, CBK licenses wallet providers, payment processors and stablecoin issuers; CMA licenses exchanges, brokers, investment advisers, managers and the offering categories. A business running a custodial exchange typically needs both. Our complete guide to VASP licensing in Kenya sets out the full allocation, the fees and the capital requirements, and its Licence Navigator calculates your combined capital floor under regulation 85(6).
What to do between now and Thursday
If you are an existing operator without a licence, these are the decisions in front of your board this week.
Work out exactly what you do. Map each activity against the ten permissible activities in the First Schedule, not against your marketing language. Some businesses will find that part of what they offer is licensable and part is not.
Decide what stops on Wednesday night. The lowest-risk course is to suspend licensable activity in or from Kenya until a licence is granted. That can mean pausing new onboarding of Kenyan customers, pausing custody or trading for them, or both. If you suspend, plan how existing customers get access to their assets. Freezing balances creates a different set of problems.
If you have filed, make the file complete. The thirty-day clock does not run on an incomplete application. Check your file against every item in regulation 6(2), from the business plan to the beneficial ownership register, and answer any regulator query quickly. Our walkthrough of what regulation 6(2) requires, document by document is a good place to start.
If you have not filed, file. Late is better than never, but file a complete application, not a placeholder. A thin file buys nothing.
Put your position in writing. Record the board’s decision, the date your application was lodged and the steps you have taken. If a regulator asks later what you did on 4 November, you want a contemporaneous answer.
Talk to your counterparties. Tell your bank, payment partners and custody provider where your application stands before they ask.
The longer view
Even once licensed, the obligations continue. Capital has to be maintained at all times, not just shown at the door. Boards have to meet the composition and fit-and-proper requirements in the Regulations. Licensed VASPs are reporting institutions for anti-money laundering purposes, with travel rule obligations on transfers, and Part XIII of the Regulations limits how virtual asset services can be advertised. We have written separately on custody and wallet obligations, board composition, AML and the travel rule and advertising rules.
Wednesday is the end of the grace period, not the end of the work. The operators who come through it well will be the ones who are honest with themselves this week about what they are doing and whether they are allowed to do it.
Clay & Associates Advocates advises virtual asset businesses on licensing before the Central Bank of Kenya and the Capital Markets Authority. If you need a view on your position before Wednesday, contact us at solutions@clay-law.com or +254 20 2100 999.
This article reflects the law as at 2 November 2026. It is general information, not legal advice on your specific circumstances.
Sources: Virtual Asset Service Providers Act, 2025 (Act No. 20 of 2025), sections 8, 40, 41, 47 and 49; Virtual Asset Service Providers Regulations, 2026 (LN 134 of 2026), regulations 6, 10 and 85(6); Penal Code (Cap. 63), section 20.
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This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.
