A new initiative has been introduced by the Nigerian Securities and Exchange Commission (SEC) in a memo dated June 21 to expedite the Virtual Assets Service Providers (VASP) registration process
The new programme, according to the regulatory authority, will function as an addendum to the current regulations and is intended to improve the current framework in order to better suit the current complexity of the nation’s cryptocurrency industry.
The Nigerian SEC made significant modifications to its regulations in March regarding the issuance of digital assets, offering platforms, exchanges, and custody.
The biggest modification was the rise in VASP registration costs from 30 million naira ($20,161) to 150 million ($100,806). This move sparked a lot of debate and conjecture due to the possibility that it would discourage corporate involvement.
The most recent modification was disclosed in a memo dated June 21. It introduced the Accelerated Regulatory Incubation Programme (ARIP) and is a specific update to these VASP registration regulations.
The new programme, which is anticipated to run for 30 days, gives all “operating and prospective” VASPs in Nigeria a window of opportunity to quickly finish all requirements, guaranteeing complete compliance all around.
To begin the Accelerated Regulatory Incubation Programme, the commission ordered all currently operating VASPs in the nation to go to the SEC ePortal.
The country’s regulatory body has the authority to prosecute any VASP that is in default.
The new project was another idea of SEC Chief Emomotimi Agama, who came into office with a reputation for being supportive of cryptocurrencies. However, since taking office, his actions and initiatives have had a negative impact on the players in the Nigerian cryptocurrency market.
When the SEC chairman launched an assault against the listing of the Naira on multiple cryptocurrency exchanges in May, it was one of his most vocal anti-crypto policies. The head of the SEC asserted that the depreciation of Nigeria’s native currency is the result of peer-to-peer trading of the naira on cryptocurrency exchanges.
Numerous cryptocurrency exchanges, including Binance and Kucoin, delisted Naira from their platforms as a result of the assault.
Thus far, the SEC’s nonverbal cues suggest that it will regulate cryptocurrencies and their related entities strictly in Nigeria. The Central Bank of Nigeria repealed its two-year ban on banks managing VASP accounts in December 2023 in an effort to adopt a more welcoming regulatory stance towards cryptocurrencies as opposed to outright outlawing them.
Although this was a good step, microfinance banks were still not allowed to handle cryptocurrency transactions. This development implies that the SEC is adamant about maintaining extremely stringent regulatory measures for the cryptocurrency industry in Nigeria, as does the increase in registration fees and the most recent ARIP programme.
Things To Note
Nigeria is one of the nations where cryptocurrency adoption is quite rapid and high. 10.3% of the population, or more than 22 million people, actively own cryptocurrency.
Due to the Nigerian SEC’s crackdown on peer-to-peer naira trading, Binance and Kucoin removed the naira from their platforms.
A dispute between Nigerian authorities and Binance Limited, the biggest cryptocurrency exchange globally, resulted in an executive from Binance being imprisoned in a Nigerian jail. Most major news sites have featured reports about the altercation between the two parties.
