Kenya’s draft rules for virtual asset firms will place a heavy burden on startups, who say high capital demands, costly insurance, and ongoing fees could push many of them out of the regulated market, according to Rober Salim, chief executive officer of the Virtual Asset Association of Kenya (VAAK), an industry group representing 50 crypto firms in the country. 

Salim noted that without changes, only a few large, well-funded players will be able to comply, while activity risks shifting back to informal and offshore platforms.

While the proposed framework is meant to bring order to a fast-growing sector and protect consumers, the industry group says the draft rules, as written, could instead narrow the field to a handful of big…