Regulation
Crypto firms will have to comply with Nigeria’s new regulations within 30 days
The Nigerian Securities and Exchange Commission (SEC) has released new guidelines aimed at virtual asset service providers (VASPs). With an amendment to the Digital Asset Issuance, Offering, Exchange and Custody Rules issued in May 2022, the SEC has now introduced the Accelerated Regulatory Incubation Program (ARIP). This comes with the appointment of the new Director General of the SEC, Emomotimi Agama.
VAPS must comply with the framework by July 21, 2024. The SEC issued a Press release in this regard, stating: “The Securities and Exchange Commission [“the Commission”] informs the public that the Regulation on the issue, offering, exchange and custody platforms of digital assets is being amended.”
On the reason for the amendment, the statement reads: “The purpose of the amendment is to broaden the scope of regulation in line with current realities.” It also instructed VASPs on the next steps: “With this circular, all operational and potential VASPs are invited to visit the SEC electronic portal complete the application process no later than 30 days from the date of this Circular.”
The SEC has also strictly stated that all VASPs operating without undergoing the registration process within the next month will witness enforcement actions, which could include bans and fines. Nigeria is one of the leaders in cryptocurrency adoption as its population has adopted this asset class en masse due to the instabilities faced by its national currency. Bitcoin is a favorite in the region.
Nigeria also introduced a retail Central Bank Digital Currency (CBDC) not long ago, but that move was largely denounced and criticized by its population. The Nigerian people think that CBDC is a way for the government to capitalize on the cryptocurrency trend and control how people transact and hold value again.
However, the SEC’s new move is aimed at strengthening Nigeria’s crypto ecosystem and protecting its users instead of going for an outright ban. Time will tell how effective the new regulations will be for crypto innovation in the region.
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