Nigerian SEC Introduces New Program For VASP Registration

The Nigerian Securities and Exchange Commission (SEC)  has launched a new initiative targeted at hastening the registration process of virtual asset service providers (VASP). According to the securities market regulators in the West African nation, this new program which serves as an amendment to existing rules aims to adjust the current regulatory framework to fit the present complexities of the crypto ecosystem.

Nigerian SEC Fixes 30-Day Deadline For VASP Registration

Back in March, the Nigerian SEC announced several changes to its Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody. Notably, the commission then hiked the registration fees of VASPs from 30 million naira ($20,161) to 150 million ($100,806) which attracted much speculation because of the potential to reduce business participation but also promoted financial stability among VASPs.

In a new memo released on June 21, the securities regulators have now unveiled a specific amendment to these VASP registration rules which introduces the Accelerated Regulatory Incubation Program (ARIP).

This program which is slated to run for 30 days appears to provide an “exclusive” window for all “operating and prospective” VASPs in Nigeria to speedily complete all requirements thus ensuring full compliance across  board.

According to the commission, the concerned parties should proceed to the SEC ePortal to commence the Accelerated Regulatory Incubation Program as all defaulting VASPs are liable to immediate prosecution from the SEC following the completion of this registration program.

Interestingly, the “puzzling” initiative follows the appointment of Emomotimi Agama as the new director-general of the Nigerian SEC in April. Agama, who came into office with a crypto-friendly reputation has found himself at loggerheads with stakeholders in a growing crypto industry in Sub-Saharan Africa. 

Specifically in May, the new DG launched a campaign against the presence of the Nigeria Naira on crypto exchanges which the Nigerian government blamed for the currency’s massive devaluation over the last year. This action led to the delisting of the Naira on several exchanges including KuCoin and Binance among others.

Nigeria To Implement Stringent Regulations For Crypto Space

In December 2023, the Central Bank of Nigeria lifted its two-year prohibition on banks operating accounts for VASPs in a bid to embrace a regulatory approach towards cryptocurrencies rather than an outright ban. 

However, despite this policy reversal, microfinance banks still appear restricted from facilitating crypto trading transactions. This development coupled with the registration fee hikes and the recent ARIP program appears the government of the West African nation will be taking a strict approach in adopting the trading and use of cryptocurrency.

Notably, Nigeria is one of the fastest-growing crypto-hubs in the world with approximately 22 million people, 10.3% of the nation’s population being active crypto owners.