Kenya's Treasury Drafts Policy to Seize Dormant Crypto Assets

Kenya's National Treasury wants legal authority to identify, take custody of and eventually seize dormant cryptocurrency and stablecoin holdings, under a draft policy that would fold digital assets into the country's unclaimed-assets regime.

The proposal sits in the Unclaimed Financial Assets National Policy 2026 draft and would expand the mandate of the Unclaimed Financial Assets Authority (UFAA) beyond its traditional remit of bank accounts and shares to cover cryptocurrencies held on exchanges and other platforms. Once an asset is deemed abandoned, the State could take custody of it.

That is a significant structural change for Kenya's digital-asset market, which is growing fast. Kenyans transacted KES 740 billion, roughly $5.7 billion, in cryptocurrencies in the year to June 2026, according to Chainalysis. That's up from KES 505 billion, about $3.89 billion, in the prior year — growth of close to 47% in shilling terms.

What would the framework actually require?

The Treasury is seeking clearer rules for three things: identifying unclaimed digital assets, valuing them, and surrendering them to the State. The framework would also place an obligation on asset holders — exchanges and other custodial platforms — to demonstrate they made genuine efforts to trace rightful owners before transferring abandoned holdings to UFAA.

In practice, that shifts a compliance burden onto Kenyan crypto platforms. They would need record-keeping and outreach processes robust enough to prove an asset is truly abandoned, not merely sitting in a wallet whose owner has gone quiet.

How do you define a 'dormant' crypto asset?

That's the hard part, and the draft policy raises the question more than it answers it. Authorities will have to:

• define what counts as a dormant crypto holding,
• establish who owns an asset, often with no KYC trail on non-custodial wallets, and
• distinguish genuinely abandoned assets from wallets whose owners are simply inactive.

Crypto users can stay offline for years by design — cold storage, hardware wallets, lost seed phrases are features, not evidence of abandonment. A dormancy threshold borrowed from bank-account rules could sweep in holdings that have living, reachable owners who simply haven't moved funds.

Is this immediate confiscation?

No. The proposal does not give the government power to confiscate inactive personal wallets straight away. It remains subject to legal and regulatory changes before any of it takes effect, meaning legislation, and likely implementing regulations, must follow the policy paper.

That gap between policy draft and enforceable law matters for Kenya's crypto sector. Platforms and users face an implementation window in which the definitional questions — dormancy thresholds, valuation methods, ownership tests — will be settled, and those details will determine whether the regime resembles a conventional unclaimed-property process or something broader.

The draft lands as Kenya steps up wider efforts to bring digital assets under regulatory oversight, with the Treasury positioning the UFAA as the custodian of last resort for value that existing financial plumbing doesn't capture.

For exchanges operating in Kenya, the practical next step is preparation: the eventual rules will demand traceable ownership records and documented owner-outreach before any handover to the State. A formal consultation and drafting process on the 2026 policy is the window in which the industry can shape those thresholds.