The Nigerian Securities Regulator is introducing new rules for virtual asset service providers (VASPs) operating within the country. These rules aim to enhance oversight and regulation of the crypto industry, particularly focusing on companies facilitating the trading, exchange, and transfer of virtual assets.
Nigeria’s SEC announces new proposal for exchanges
One of the key proposals by the Nigerian Securities and Exchange Commission (SEC) is the requirement for VASPs to be incorporated in Nigeria and maintain a physical office within the country. Additionally, the CEO or managing director of these companies must reside in Nigeria, ensuring a local presence and accountability. The proposed amendments also extend to foreign or non-residential operators targeting Nigerian users directly or through their agents.
This broader scope signifies the SEC’s intention to regulate all platforms involved in virtual asset activities within Nigeria’s jurisdiction. However, the SEC has clarified that certain entities, such as tech firms providing infrastructure or software to digital asset exchanges, and financial portals aggregating content and providing links to financial sites, are exempt from these rules.
This targeted approach aims to streamline regulations while allowing supportive services to operate without unnecessary constraints. The timing of these proposed amendments aligns with Nigeria’s efforts to assert control over foreign crypto exchanges, which authorities believe have contributed to the rapid depreciation of the local currency.
Proposed amendments and regulatory landscape
Recent actions, including directives to block certain digital asset platforms and the detention of senior executives from a prominent crypto exchange, reflect Nigeria’s stance on enforcing regulatory compliance within the crypto space. In a strategic move, the Nigerian SEC has replaced the previous requirement for foreign crypto exchanges to establish local offices with a broader mandate.
This shift indicates a more comprehensive approach to regulatory oversight, emphasizing the need for compliance across various functions within digital asset entities. Alongside these regulatory changes, the SEC has revised the fees associated with crypto license applications. The proposed fee increases, including a fivefold rise in registration fees, demonstrate the regulator’s intent to bolster resources for effective oversight and enforcement.
Stakeholders and industry participants have been given a window to provide feedback on these proposed amendments. The SEC has set a deadline for submitting comments, encouraging dialogue and collaboration between regulators and the crypto community to ensure a balanced and effective regulatory framework.
Overall, Nigeria’s proposed regulatory changes for virtual asset service providers signify a proactive step towards strengthening oversight, enhancing accountability, and promoting a healthy and compliant crypto ecosystem within the country’s regulatory framework. These measures are crucial for fostering investor confidence, protecting consumers, and mitigating risks associated with digital asset activities.
