Accelerated Registration for Virtual Asset Providers: Nigerian SEC Promotes New Crypto Deadline

• The Nigerian Securities and Exchange Commission (SEC) has introduced an initiative to expedite the registration process for virtual asset service providers (VASP).
• The new program aims to amend existing rules to accommodate the evolving complexities of the crypto ecosystem.
• This initiative includes a 30-day registration window and has raised the registration fees significantly.

Learn about the Nigerian SEC’s new crypto regulations and how they impact virtual asset service providers.

Nigerian SEC Mandates 30-Day VASP Registration Period

Earlier this year in March, the Nigerian SEC made significant changes to its regulations on Digital Assets Issuance, Offering Platforms, Exchange, and Custody. One of the notable amendments was the increase in VASP registration fees from 30 million naira ($20,161) to an eye-watering 150 million naira ($100,806). This move, while intended to promote financial stability, raised concerns about its potential negative impact on business involvement.

On June 21, the SEC unveiled a further amendment with the introduction of the Accelerated Regulatory Incubation Program (ARIP). This program, running for just 30 days, offers an “exclusive window” for both current and prospective VASPs in Nigeria to meet all regulatory requirements. Any VASP failing to comply by the end of this period faces immediate prosecution by the SEC.

The SEC has directed concerned parties to use its ePortal to commence the ARIP, reinforcing its commitment to ensuring regulatory compliance across the board.

Interestingly, this directive came soon after Emomotimi Agama assumed the role of director-general of the Nigerian SEC in April. Known for his crypto-friendly stance, Agama has quickly found himself in conflict with the growing crypto community in Sub-Saharan Africa.

In May, Agama spearheaded a crackdown on the use of the Nigerian Naira on crypto exchanges—an action stemming from the government’s concerns over the currency’s significant devaluation over the past year. Consequently, several exchanges, including KuCoin and Binance, delisted the Naira from their platforms.

Nigeria Enforces Tight Crypto Regulations

Despite lifting its two-year ban on banks holding accounts for VASPs in December 2023, Nigeria’s approach to cryptocurrency remains stringent. Microfinance banks, in particular, continue to face restrictions when it comes to facilitating crypto trading transactions. This stance, coupled with the steep registration fee hikes and the ARIP, suggests that Nigeria is leaning towards a highly regulated crypto environment.

Nigeria is rapidly emerging as a significant crypto hub with approximately 22 million active crypto owners, making up about 10.3% of its population. The mixed regulatory signals from the government indicate an effort to balance control with the burgeoning interest in cryptocurrency within the nation.

Conclusion

The Nigerian SEC’s recent initiatives reflect a clear intent to streamline the regulatory environment for virtual asset service providers while maintaining stringent oversight. These moves, while potentially discouraging for some businesses, could establish a more stable and compliant crypto scene in Nigeria. As one of the fastest-growing crypto markets globally, Nigeria’s regulatory approach will undoubtedly influence its future role in the global crypto ecosystem.