CMA Tightens Its Grip on Crypto With a New Tracking System. Here’s What Regulators Are Looking to Uncover.

Kenya’s capital markets regulator is seeking to acquire a blockchain analytics system that would allow it to monitor cryptocurrency transactions, flag suspicious activity and strengthen oversight of the fast growing virtual assets market. The Capital Markets Authority (CMA) has invited bids for a Virtual Assets Blockchain Analytics System, signalling a shift from relying largely on compliance reports to using on chain intelligence in supervision and enforcement.

The platform is expected to track transactions across blockchain networks in real time and retrieve historical data when needed. It would identify high risk wallets, unusually large transfers, links to sanctioned entities and possible exposure to fraud, money laundering, terrorism financing, tax evasion and other illicit activity. Unlike traditional bank transfers, blockchain transactions do not generally display users names. They are recorded through wallet addresses (unique strings of letters and numbers used to send and receive digital assets). Analytics tools examine these public records to follow the movement of funds, identify transaction patterns and connect potentially related wallets.

The system would also give CMA investigators tools to trace funds across multiple wallets, map links between addresses, reconstruct transaction timelines and generate evidence for regulatory or law enforcement action. Alerts could be configured to notify officials when tagged wallets or entities show new activity.

The procurement follows the enactment of the Virtual Asset Service Providers Act, 2025, which created Kenya’s legal framework for licensing and regulating crypto businesses. CMA and the Central Bank of Kenya share oversight of the sector, with the authority expected to supervise virtual asset exchanges, brokers, investment advisers and asset managers, while the central bank oversees stablecoins and payment related activities. For crypto businesses, the planned system raises the prospect of closer scrutiny as Kenya prepares to bring the sector into a formal licensing regime. The rules are still being finalised and no provider has been licensed so far, but the CMA is already building the tools it will need to monitor the market once supervision begins.

Kenya’s growing use of cryptocurrencies particularly for stablecoin transfers, remittances and cross border payments, is increasing the need for closer oversight. The country received an estimated $3.3 billion(Sh444.64 billion) in stablecoin inflows in the year to June 2024, placing it fourth in Africa, according to Chainalysis. The planned system is intended to give regulators a clearer view of transactions that have largely operated beyond conventional financial monitoring systems.