IMF urges Kenya to enact legislation to implement the Travel Rule and share crypto user identity information with local authorities.

According to Business Daily, the International Monetary Fund (IMF) has urged Kenya to mandate cryptocurrency companies to share customer identity information with the government to prevent money laundering and push for legislation to implement the Travel Rule. The rule, an international anti-money laundering standard set by the Financial Action Task Force (FATF), requires virtual asset service providers (VASPs) to collect, verify, and share sender and recipient identity information during crypto transfers, with relevant data to be exchanged between service providers and Kenya’s Financial Reporting Centre (FRC), its financial intelligence unit. Kenya has been on FATF’s “grey list” since February 2024 due to gaps in its anti-money laundering and counter-terrorist financing frameworks. In its latest advisory, the IMF noted that “significant gaps remain in FATF-aligned crypto asset transfer information exchanges” and called for the relevant obligations to be incorporated into the recently released Virtual Asset Service Provider (VASP) Regulations or other appropriate legal documents as soon as possible. Previously, local authorities had required service providers to retain Kenyan customers’ identities and full transaction records for tax purposes, with trading platforms withholding digital asset tax at a 3% rate for remittance to the Kenya Revenue Authority (KRA). Chainalysis data shows that in the year ending June 2026, Kenya’s crypto transfer volume hit a record 740 billion Kenyan shillings (around $5.7 billion), making it Africa’s third-largest crypto economy, surpassing Ethiopia and trailing only South Africa and Nigeria. Local crypto activity is dominated by stablecoins, with Bitcoin accounting for just 2.0% of transactions – far lower than Nigeria’s 92%, Ghana’s 59%, and South Africa’s 22%. The IMF also pointed out that peer-to-peer (P2P) transactions are common in Kenya, a trend market participants say has fueled scams.