CMA Seeks Virtual Assets Blockchain Analytics System to Fight Crypto Fraud, Money Laundering

Kenya’s capital markets regulator is moving to strengthen oversight of the rapidly expanding virtual assets industry by acquiring a blockchain analytics system capable of monitoring cryptocurrency transactions in real time.

The Capital Markets Authority (CMA) has launched plans to procure a Virtual Assets Blockchain Analytics System that will provide transaction monitoring, anti-money laundering and counter-terrorism financing (AML/CFT) screening, wallet attribution, sanctions checks, fraud detection and forensic investigation capabilities.

The move comes as Kenya prepares to implement the regulatory framework established under the Virtual Assets Service Providers Act, 2025, which gives the CMA powers to supervise and regulate virtual asset service providers (VASPs) operating in the country.

The proposed system will form a critical part of the regulator’s supervisory infrastructure, enabling it to monitor virtual asset markets, assess risks, investigate suspicious activities and support enforcement actions.

CMA Expands Oversight Role under Virtual Assets Law

The CMA is an independent public agency established under the Capital Markets Act, Cap 485A, with the mandate to regulate, supervise, license and monitor capital market intermediaries and market infrastructure institutions in Kenya.

Under the Virtual Assets Service Providers Act, 2025, the regulator has been assigned responsibility for overseeing scheduled virtual asset activities, including:

• Virtual asset exchanges
• Virtual asset brokers
• Virtual asset asset managers
• Investment advisers
• Other virtual asset-related activities prescribed under the law

The expanded mandate requires the authority to develop new technology capabilities that can support licensing, compliance monitoring, market surveillance, investigations, enforcement and investor protection in Kenya’s emerging digital asset economy.

The blockchain analytics platform will provide CMA with the tools required to supervise regulated virtual asset businesses and identify risks within blockchain-based financial ecosystems.

Rising Crypto Adoption Creates New Regulatory Challenges

The rapid growth of virtual assets and blockchain-based financial services has created new opportunities for financial innovation but has also introduced significant regulatory risks.

Globally, regulators have raised concerns around the use of cryptocurrencies and blockchain networks for:

• Money laundering
• Terrorism financing
• Fraudulent investment schemes
• Market manipulation
• Sanctions evasion
• Tax evasion
• Cyber-enabled scams
• Cross-border illicit financial flows

CMA said the increasing complexity of blockchain transactions requires advanced supervisory technology capable of providing deeper visibility into digital asset activities.

The regulator is therefore seeking a system that will enable intelligence-driven oversight of blockchain transactions and strengthen its ability to identify suspicious activity among licensed and prospective virtual asset service providers.

Blockchain Analytics System to Track Crypto Transactions in Real Time

The planned Virtual Assets Blockchain Analytics System will provide end-to-end visibility into blockchain transactions, wallets, entities and broader virtual asset ecosystems.

Among its key capabilities will be:

• Real-time and historical blockchain transaction monitoring
• Risk detection and automated alerts
• Wallet identification and attribution
• Entity clustering and relationship mapping
• Fund tracing and transaction analysis
• Sanctions screening
• Fraud detection
• Market abuse monitoring
• Digital asset forensic investigations

The technology will allow CMA investigators to trace cryptocurrency flows across blockchain networks, identify links between wallets and entities, and generate intelligence to support regulatory decisions.

System to Support AML, Fraud Investigations and Enforcement

A major focus of the blockchain analytics platform will be strengthening Kenya’s anti-money laundering and counter-terrorism financing controls.

The system will provide CMA with capabilities to:

• Screen virtual asset transactions against sanctions databases
• Detect suspicious transaction patterns
• Identify high-risk wallets and entities
• Conduct forensic blockchain investigations
• Generate evidence for enforcement proceedings
• Support investigations into fraud and market misconduct

The regulator also expects the technology to improve investor protection by enabling faster identification of fraudulent activities and potentially harmful virtual asset schemes.

CMA Seeks Integration with Existing Regulatory Systems

The successful bidder will be required to supply, configure, integrate, test and operationalise the blockchain analytics platform while ensuring compatibility with CMA’s existing technology environment.

The system will be expected to integrate with relevant internal and external platforms, including:

• Regulatory information systems
• Case management systems
• Identity verification services
• Security monitoring tools

The solution will also require strong cybersecurity controls, including:

• Secure access management
• Audit logging
• Data protection controls
• Backup systems
• Business continuity measures
• Disaster recovery capabilities

CMA will also require comprehensive user training, investigative training and knowledge transfer to ensure internal teams can effectively operate the platform.

Kenya Moves toward Formal Crypto Regulation

The deployment of blockchain analytics technology marks a significant step in Kenya’s transition from monitoring virtual assets to actively regulating the sector.

Kenya has emerged as one of Africa’s largest cryptocurrency markets, driven by increased adoption of digital assets, blockchain-based financial services and peer-to-peer crypto trading platforms.

However, regulators have faced challenges in monitoring transactions conducted on decentralised blockchain networks, where traditional financial surveillance tools are often insufficient.

By adopting specialised blockchain intelligence technology, CMA aims to align Kenya’s virtual asset regulatory framework with global standards while balancing innovation with financial system stability.