Internet reports that the Kenyan government is drafting a law requiring virtual asset service providers to set up local offices to strengthen regulation of the fast-growing digital asset industry. The proposed policy does not apply to assets that cannot be transferred, traded, or used for payments and investments outside a closed ecosystem, and aims to address gaps in legal and regulatory frameworks in the virtual asset space and address issues such as consumer protection, governance, data privacy and cybersecurity. Kenya introduced a 3% income tax on digital asset transactions in 2023, but has not yet established a comprehensive industry regulatory framework. With this move, the government hopes to fill a regulatory gap while also addressing industry risks such as money laundering, terrorist financing, tax evasion, fraud and cybercrime.