The International Monetary Fund has urged Kenya to force cryptocurrency exchanges to identify the people sending and receiving digital assets, warning that a gap in the country’s new crypto rules could slow its exit from the global money laundering grey list.

In a technical assistance report on Kenya’s crypto regulations, the Fund said the country’s framework is missing a binding legal duty for crypto-asset service providers to apply the Financial Action Task Force (FATF) Travel Rule — the international standard that requires exchanges to collect and share identifying information about both sides of a qualifying transfer.

What the IMF wants changed

The Fund wants the Travel Rule written into Kenya’s Virtual Asset Service Providers Regulations, or another legal instrument, without delay. Kenya’s Financial Reporting Centre, the country’s financial intelligence unit, is already revising related regulations under the Proceeds of Crime and Anti-Money Laundering Act to close the hole, and the data collected would flow to the Centre.

The recommendation lands as Kenya’s crypto market keeps growing. Chainalysis data cited by the IMF show Kenyans moved a record Sh740 billion — about $5.7 billion — in cryptocurrencies in the year to June 2026.

Kenya’s grey-list timetable

Kenya was placed on the FATF grey list of jurisdictions under increased monitoring in February 2024, after the watchdog found weaknesses in its anti-money laundering and counter-terrorism financing regime. Officials say the country has addressed 19 of the 21 deficiencies in its action plan and is targeting removal from the list by April 2027. The FATF’s next plenary is scheduled for 22 to 26 February 2027.

Key reforms already in place include the Anti-Money Laundering and Combating of Terrorism Financing (Amendment) Act, 2025, and the Virtual Asset Service Providers Act, 2025, which commenced on 4 November 2025 and brought crypto firms under the Proceeds of Crime and Anti-Money Laundering Act as reporting institutions. Existing operators faced a hard licensing deadline of 4 November 2026, under joint oversight by the Central Bank of Kenya and the Capital Markets Authority.

Why the Travel Rule matters

Grey listing is not a sanction, but it increases scrutiny of financial transactions involving Kenyan institutions, raises compliance costs for banks and businesses, and can discourage foreign investment. The IMF warned that failing to close the remaining transparency gap could delay Kenya’s planned exit, leaving a known vulnerability that exposes the financial system and ordinary users to money laundering and fraud.

Enhanced supervision of virtual asset service providers is one of the two outstanding action items standing between Kenya and delisting. With the licensing window now closed, the Fund’s message is that the rules must now be shown to work in practice, not just on paper.

Frequently asked questions

What is the FATF Travel Rule? It is an international anti-money laundering standard requiring crypto exchanges to collect and share identifying information about the sender and recipient of a transfer.

When does Kenya hope to leave the grey list? Kenyan officials are targeting removal by April 2027, after addressing 19 of 21 action items.

How big is Kenya’s crypto market? Kenyans moved about Sh740 billion ($5.7 billion) in cryptocurrencies in the year to June 2026, according to Chainalysis data cited by the IMF.

Sources: Kenya Insights and Africa Updates.; crypto.news