Regulation
Nigerian SEC Introduces New Program for VASP Registration
The Nigerian Securities and Exchange Commission (SEC) has launched a new initiative aimed at speeding up the registration process of Virtual Asset Service Providers (VASPs). According to securities market regulators in the West African nation, this new program which serves as an amendment to existing rules aims to adjust the current regulatory framework to suit the current complexities of the crypto ecosystem.
The Nigerian SEC sets a 30-day deadline for VASP registration
Back in March, the Nigerian SEC announced numerous changes to rules on digital asset issuance, bidding platforms, trading and custody. Notably, the commission then increased VASP registration fees from 30 million naira ($20,161) to 150 million ($100,806), which attracted much speculation due to the potential reduction in corporate participation, but also promoted financial stability among VASPs.
In a new note released on June 21stSecurities regulators have now unveiled a specific change to the VASP registration rules that introduces the Accelerated Regulatory Incubation Program (ARIP).
This program, scheduled to last for 30 days, appears to provide an “exclusive” window for all “operational and prospective” VASPs in Nigeria to quickly complete all requirements thus ensuring full compliance at all levels.
According to the commission, interested parties should apply to the SEC’s electronic portal to initiate the accelerated regulatory incubation program as all defaulting VASPs are liable to be immediately prosecuted by the SEC upon completion of this registration program.
Interestingly, the “baffling” move follows the appointment of Emomotimi Agama as the new Director General of the Nigerian SEC in April. Agama, who came into office with a pro-cryptocurrency reputation, has found himself at loggerheads with stakeholders in a growing cryptocurrency sector in sub-Saharan Africa.
Specifically in May, the new DG launched a campaign against the presence of the Nigerian Naira on cryptocurrency exchanges which the Nigerian government has blamed for the currency’s massive devaluation over the past year. This action led to the delisting of the Naira on several exchanges including KuCoin and Binance, among others.
Nigeria will implement strict regulations for the crypto space
In December 2023, the Central Bank of Nigeria lifted up its two-year ban on banks operating accounts for VASPs in an effort to embrace a regulatory approach towards cryptocurrencies rather than an outright ban.
However, despite this policy reversal, banks continue to finance microfinance appear limited from facilitating cryptocurrency trading transactions. This development, coupled with increases in registration fees and the recent ARIP program, looks like the West African nation’s government will take a strict approach in adopting cryptocurrency trading and use.
Notably, Nigeria is one of the fastest growing crypto hubs in the world approximately 22 million people, 10.3% of the national population are active owners of cryptocurrencies.
Featured image from The Cable, chart from Tradingview