An amendment was introduced to the Kenyan law in capital markets on Nov. 21 that would require those who own or deal in cryptocurrencies to provide the country’s Capital Markets Authority with information on their activities for tax purposes, local media report. This is the first time Kenya has extended financial regulation to cryptocurrency.

Under the Capital Markets (Amendment) Bill, Kenyans would pay capital gains taxes to the Kenyan Revenue Authority when they sell or use digital currencies. Cryptocurrency held for less than a year would be subject to income tax, while after that capital gains tax would apply. Kenya has an income tax that ranges from 10% to 30%. Banks already charge an excise duty of 20% on all commissions and fees on crypto trades.

The Kenya Revenue Authority (KRA) will go after the more than 4M Kenyans who own #crypto, if MPs approve changes to the Capital Markets (Amendment) Bill, 2022, aimed at regulating and taxing the fast-growing digital currency trade. pic.twitter.com/LRlAgPJucJ

Author of the bill MP Abraham Kirwa said:

The bill would define digital currencies as securities, provide for the licensing of individual crypto traders and create a centralized electronic register of transactions in digital currencies in the country. It would also institute consumer protection measures, such as by creating a fund “to protect investors from financial loss arising from the failure of a licenced broker or dealer” and privacy guarantees.

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A Chainalysis survey released in September ranked Kenya 19th worldwide in cryptocurrency adoption and fifth in peer-to-peer trading. The proposed amendment comes