To strengthen cryptocurrency regulation, Nigeria SEC launches 30-day registration period

The Nigeria Securities and Exchange Commission (SEC) recently launched a new registration scheme aimed at accelerating the registration process for Virtual Asset Service Providers (VASPs). According to the West African country’s securities market regulator, the move is an important amendment to existing rules to bring the regulatory framework up to date and adapt to the growing complexity of the cryptocurrency ecosystem.

Nigerian SEC sets 30-day deadline to expedite VASP registration

In March this year, the Nigerian SEC announced changes to digital asset issuance, issuance platforms, trading and custody rules, the most notable of which was to increase the registration fee for VASPs from 30 million naira (approximately US$20,161) to 150 million Naira (approximately $100,806). This change has triggered widespread speculation in the industry. On the one hand, it may inhibit corporate participation, and on the other hand, it will help improve the financial stability of VASPs.

On June 21, the Nigerian SEC issued a new memorandum, announcing revisions to VASP registration rules and introducing the Accelerated Regulatory Incubation Program (ARIP). The program, which is expected to run for 30 days, provides a fast track for all operating and potential VASPs in Nigeria to expeditiously meet all registration requirements, ensuring full compliance. The Nigerian SEC emphasized that all relevant parties should initiate ARIP through its electronic portal, as VASPs that fail to comply with the registration plan will face prosecution by the Nigerian SEC immediately upon completion of registration.

It is worth noting that these new initiatives follow the appointment of Emomotimi Agama as the new director of Nigeria’s SEC in April. Agama is known for his crypto-friendly stance, but soon after taking office he fell out with stakeholders in sub-Saharan Africa’s growing cryptocurrency industry. In particular, in May this year, Agama launched a campaign against the presence of the Nigerian naira on cryptocurrency exchanges, which the Nigerian government blamed as one of the reasons for the currency’s sharp depreciation last year. The action resulted in the naira being delisted from several exchanges, including KuCoin and Binance.

Through these measures, the Nigerian SEC shows its determination to implement strict supervision of VASPs, and also reflects the Nigerian government’s regulatory attitude and strategy in the field of cryptocurrency. Although Nigeria is one of the fastest growing cryptocurrency hubs in the world, these actions by the government could have a profound impact on the country’s cryptocurrency market.

Nigeria strengthens regulation in cryptocurrency field

The Central Bank of Nigeria took an important step in December 2023 by lifting a long-standing ban on banks opening accounts for virtual asset service providers (VASPs), marking a shift in Nigeria’s attitude towards cryptocurrencies from a total ban to regulatory inclusion . Although this policy reversal shows the government’s more open stance towards cryptocurrencies, microfinance banks still appear to face obstacles in facilitating cryptocurrency transactions.

In addition, the Nigerian Securities and Exchange Commission (SEC) recently increased VASP registration fees and launched the Accelerated Regulatory Incubation Program (ARIP). These initiatives indicate that the Nigerian government may adopt more stringent regulatory measures on the acceptance and use of cryptocurrency. These policy changes, coupled with the Nigerian SEC’s new memorandum and the launch of the ARIP program, reflect the West African nation’s strict stance on cryptocurrency regulation.

Notably, Nigeria has become one of the fastest growing cryptocurrency markets in the world. There are approximately 22 million people in the country, 10.3% of whom are active cryptocurrency holders. This large user base highlights Nigeria’s important position in the cryptocurrency field and also illustrates the urgency and importance of the country’s government to strengthen regulation. With the gradual improvement of the regulatory environment, Nigeria is expected to provide a more solid foundation for the legal and healthy development of cryptocurrency.

Conclusion

The Nigerian SEC has demonstrated its determination to strengthen cryptocurrency regulation by introducing a 30-day registration period for VASPs. This measure aims to improve the transparency and security of the market by accelerating the compliance process, while creating a more stable and predictable operating environment for VASPs.

As Nigeria rapidly develops in the cryptocurrency space, the government’s regulatory strategy continues to evolve. Through proactive regulatory measures, Nigeria not only protects the interests of investors, but also lays the foundation for the legalization and further innovation of cryptocurrency. This move indicates that Nigeria may become an important regulatory model in the global cryptocurrency field and lead the healthy development of the industry.

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