The Capital Markets Authority of Kenya (CMA Kenya) is advancing plans to reduce risks tied to trading in virtual assets by creating a dedicated fund to compensate investors if a licensed virtual-asset dealer fails to fulfil its obligations, underscoring the Kenyan government’s efforts to build the country into a digital finance hub.
CMA Chief Executive Wycliffe Shamiah told The EastAfrican that talks are underway on a compensation mechanism for people who buy and sell virtual assets, separate from the current Investor Compensation Fund (ICF) used for equity investors.
Shamiah explained that the existing ICF covers investors when brokers or investment banks go under, but with the growing number of players acting like brokers, especially in the virtual-assets space, there is a need for broader protection.
“A number of discussions are ongoing,” he said, noting that support for virtual-asset companies in case of failure might need a different arrangement than the current ICF.
A virtual or digital asset refers to digitally stored content or resources that have value and can be owned, traded or managed, including cryptocurrencies and digital tokens secured on blockchain technology.
In 2025, President William Ruto signed the Virtual Asset Service Providers (VASP) Act 2025 into law establishing a legal framework for regulating cryptocurrencies.
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The CMA says compensation mechanisms for equity investors and virtual-asset investors will be separate, because the markets involve different players and products. Details on how the new compensation fund would work, including its funding sources, are still being discussed.
Shamiah noted that while both equity and virtual-asset markets fall under CMA regulation, the two are distinct, and mixing them under one fund may not be appropriate.
Currently, stock investors who lose money due to the failure of a licensed broker are compensated from the ICF, with a maximum payout of KES 200,000 (about $1,550) per investor.
The ICF is funded by interest earned on funds held between subscription closing dates and refunds, transaction levies on share and bond trading through the Nairobi Securities Exchange (NSE), and penalties on operators who break CMA rules.
Shamiah said the compensation limit for equity investors was increased to KES 200,000 from KES 50,000, although there have not been significant market shocks recently. Discussions are also underway on widening the ICF’s coverage.
In November 2025, the CMA revealed it is in talks with major virtual-asset firms, including those dealing in Bitcoin, about listing shares on the NSE as part of efforts to deepen the market.
About four to five virtual-asset companies, mainly from the U.S and UK, have shown strong interest in selling shares to Kenyan investors through the bourse.
Such listings would allow investors to gain exposure to virtual-asset companies in a model similar to exchange-traded funds (ETFs), which let investors trade assets like gold indirectly by owning shares in gold-dealing firms.
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