Kenya's National Treasury is moving to acquire powers to identify and seize abandoned or inactive cryptocurrency assets, the latest step in the government's broader effort to bring digital assets under formal regulatory oversight.

The proposal immediately raises several unresolved questions, among them how authorities will define dormant crypto holdings, how ownership will be established, and how regulators will distinguish genuinely abandoned assets from wallets whose owners are simply inactive.

Dormant Digital Assets Under the UFAA

The Treasury has proposed bringing dormant cryptocurrencies and stablecoins under the Unclaimed Financial Assets Authority (UFAA), which would allow the State to take custody of digital assets deemed abandoned. The UFAA is the state agency that currently holds unclaimed bank accounts, shares, and other traditional financial assets in trust for their rightful owners — assets that reach the authority through identifiable intermediaries such as banks and share registrars.

The proposal is contained in the draft Unclaimed Financial Assets National Policy 2026. Under the plan, UFAA's mandate would be expanded beyond its traditional scope to cover digital currencies held on exchanges and other platforms — extending a surrender-based framework, built around bank accounts and shares, to an asset class where holders can also control assets directly without any intermediary.

The Treasury is seeking clearer rules for identifying, valuing, and surrendering unclaimed digital assets. The framework would additionally require asset holders to demonstrate efforts to trace rightful owners before transferring abandoned holdings to the authority. For exchanges and platforms, that would mean applying tracing-and-surrender duties similar to those already familiar to banks and other traditional asset holders.

Rapid Growth in Kenya's Crypto Market

The move comes as Kenya's cryptocurrency market continues to expand. According to Chainalysis, Kenyans transacted KES 740 billion ($5.7 billion) in cryptocurrencies in the year to June 2026, up from KES 505 billion ($3.89 billion) a year earlier — a roughly 46% rise in transaction value that illustrates the scale of digital-asset activity any dormancy framework would seek to account for.

No Immediate Confiscation of Personal Wallets

Despite the expanded powers being sought, the proposal does not mean the government can immediately confiscate inactive personal wallets. Any such authority remains subject to legal and regulatory changes before it could take effect. The distinction is significant: the draft policy explicitly targets digital currencies held on exchanges and other platforms, while assets in self-custodied wallets — where no intermediary controls the keys — sit outside that description, leaving their treatment among the questions policymakers would need to settle.

How the draft Unclaimed Financial Assets National Policy 2026 is finalized — particularly the definition of dormancy and the process for rightful owners to reclaim assets held in state custody — will be the detail to watch as Kenya's approach to digital-asset oversight takes shape.

Source: BitcoinKE