Key Highlights
- Kenya denied plans for new crypto taxes on crypto holding but proposed stricter reporting rules and higher compliance costs for exchanges.
- Finance Bill 2026 proposes a 10% excise duty on crypto service fees, raising concerns over higher trading costs in Kenya.
- Binance account freezes and new crypto regulations are fueling frustration among Kenyan traders amid economic pressure.
Kenya’s Treasury moved to ease growing public concern over the Finance Bill 2026 after reports suggested the government planned new taxes on cryptocurrency holdings. Treasury Cabinet Secretary John Mbadi rejected the claims on Monday, saying the proposed measures focus on tax reporting and compliance within Kenya’s expanding crypto sector.
His remarks come as protests spread across Nairobi and other towns over broader concerns about taxes, digital payments, fintech services, and crypto trading.
According to a local report, Mbadi spoke during a press briefing after the Treasury released infographics explaining the proposals. He said the government wants to address regulatory gaps around digital asset transactions while keeping tax rules fair across industries. “The proposal therefore seeks to apply reporting and record-keeping principles,” Mbadi said.
However, the Finance Bill still includes a proposed 10% excise duty on fees charged by Virtual Asset Service Providers, a measure that could increase operating costs for crypto exchanges in Kenya.
Crypto industry faces rising compliance pressure
Kenya’s proposed excise duty would double the current 5% tax charged on betting firms, increasing pressure on crypto companies operating in the country. Under the Finance Bill, digital asset firms would also need to pay a KSh 150 million licensing fee before launching services, alongside annual renewal charges of KSh 2 million.
The proposal would also require crypto exchanges to submit annual customer and transaction reports to the Kenya Revenue Authority. Industry analysts warn that higher compliance costs and stricter regulations could push some crypto firms toward more favorable markets in the region. Consequently, Kenya risks slowing its growth as a regional hub for blockchain investment and digital asset trading.
The proposed measures have also raised concerns across the fintech industry. Payment processors and banks may pass rising compliance costs on to customers through higher service charges. As a result, digital payments, remittances, and online transactions could become more expensive for both consumers and businesses in Kenya.
Binance freeze controversy deepens public frustration
Meanwhile, crypto exchange Binance faces growing criticism in Kenya after freezing several crypto accounts following requests from the Directorate of Criminal Investigations. Some traders said authorities failed to provide formal charges, court orders, or clear timelines explaining the restrictions.
One affected user wrote, “No complainant identified. No formal charges. No timeline given.” Binance has reportedly advised affected customers to contact Kenyan police authorities directly for further information regarding the account freezes.
The exchange now plans to host an X Spaces discussion next week alongside the AML Association of Kenya. Comedian Eddie Butita said the session will focus on compliance concerns and ongoing disputes surrounding frozen accounts. However, frustration continues to build among Kenyan traders, many of whom increasingly rely on crypto trading during the country’s economic slowdown.
Also Read: Indonesia Blocks Polymarket After Bet on Prabowo’s Presidency Goes Viral
