The Nigerian Securities and Exchange Commission (SEC) now mandates that Virtual Assets Service Providers (VASPs) must establish an office within Nigeria to participate in its regulatory framework.
According to a recent announcement, entities must be incorporated and have a physical office in Nigeria to qualify for the Accelerated Regulatory Incubation Programme (ARIP), which aims to onboard VASPs in the country.
CEOs Must Reside Locally
The SEC’s new requirement also stipulates that the CEO or Managing Director of these firms must reside in Nigeria. Additionally, applicants must be involved in investment and securities business and either seek registration or have pending applications related to virtual assets with the SEC.
In a circular issued on June 21, the SEC directed all existing and prospective VASPs, including crypto brokers and dealers, to complete their applications via the SEC ePortal within 30 days.
ARIP Framework
While the rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody are being updated, VASPs are required to operate under the ARIP for now. The ARIP aims to speed up the onboarding process for entities seeking SEC registration, offering a temporary approval in principle until the Digital Assets Rules are fully in place.
This framework applies to virtual asset service providers and token issuers conducting business in Nigeria or offering services to Nigerian consumers, covering platforms involved in the offering, trading, exchange, custody, and transfer of virtual/digital assets.
Compliance and Fines
Applicants must provide a sworn statement confirming no convictions for fraud or dishonesty, an operational plan, a business model with a clear value proposition, and provisions for investor protection. Noncompliance with these requirements could result in fines for VASPs.
Summary Review: The Nigerian SEC’s new requirements for VASPs reflect a move toward greater regulation and oversight in the country’s rapidly growing crypto market. By mandating local offices and residency for CEOs, the SEC aims to ensure that crypto firms are more accountable and accessible. This initiative, coupled with the Accelerated Regulatory Incubation Programme, seeks to streamline the onboarding process while protecting investors and maintaining market integrity. As these regulations come into effect, they could significantly impact how crypto businesses operate in Nigeria, promoting a more structured and transparent environment for digital assets.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
