The Nigerian Securities and Exchange Commission (SEC) has recently introduced new guidelines for Virtual Asset Service Providers (VASPs) in the country. This comes as an amendment to the Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody, which was issued in May 2022. The SEC has also launched the Accelerated Regulatory Incubation Program (ARIP) with the appointment of the new Director-General, Emomotimi Agama.
According to the new guidelines, VASPs are required to comply with the framework by 21 July 2024. The SEC has issued a press release informing the public about the ongoing amendment process, stating that the purpose is to expand the scope of regulation in line with current realities. VASPs are directed to complete the application process on the SEC ePortal within 30 days of the circular.
It is important to note that any VASPs operating without completing the registration process within the specified timeframe may face enforcement action, including bans and fines. Nigeria has been a leader in crypto adoption, with its population showing great interest in digital assets, especially Bitcoin, due to the instability of the national currency.
While Nigeria has recently introduced a retail Central Bank Digital Currency (CBDC), it was met with criticism from the public. Many believe that the CBDC is an attempt by the government to control transactions and value storage. In contrast, the new regulations by the SEC aim to strengthen the country’s crypto ecosystem and protect users, rather than imposing an outright ban on cryptocurrencies.
It will be interesting to see how effective these new regulations will be in fostering crypto innovation in Nigeria. With the deadline for compliance approaching, VASPs need to ensure they adhere to the guidelines set by the SEC to continue operating in the country’s growing crypto market. Time will tell the impact of these regulatory changes on the crypto industry in Nigeria.