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  • Writer's pictureBrandon Zemp

Nigerian SEC Announces New Rules & Compliance Program for Digital Assets

Nigerian SEC Announces New Rules & Compliance Program for Digital Assets

The Nigerian Securities and Exchange Commission (SEC) has revised its regulations concerning Digital Asset Issuance, Offering Platforms, Exchange, and Custody. Through an official announcement, the SEC has detailed its intentions to modernize these essential rules. The amendments aim to improve the regulatory landscape by ensuring it is thorough and adaptable to the intricacies of digital asset markets.

Within the framework of this regulatory reform, the SEC launched a unique compliance initiative known as the Accelerated Regulatory Incubation Programme (ARIP). Tailored for Virtual Assets Service Providers (VASPs), this program provides a route for these entities to meet the updated regulatory standards.

The SEC has established a dedicated onboarding window for VASPs to join the ARIP, as stated in the circular on the SEC's website. VASPs must complete the onboarding process via the SEC ePortal within 30 days of the circular's issuance to enhance compliance. The SEC has cautioned VASPs that regulatory measures will be taken against non-compliant entities that do not follow the guidelines outlined in the circular.

After the appointment of a new Director-General, Emomotimi Agama, at the SEC, the initial Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody, issued in May 2022, have been amended. It is strongly emphasized that the Nigerian government and regulators should responsibly regulate the virtual assets industry instead of resorting to clampdowns, crackdowns, and shutdowns to reposition the Nigerian market.

In March, the Securities and Exchange Commission (SEC) of Nigeria proposed a revision to the regulations governing platforms that provide cryptocurrency services, recommending an increase in the registration fee for cryptocurrency exchanges from 30 million naira ($18,620) to 150 million naira ($93,000). Nigeria has emerged as one of the rapidly growing cryptocurrency markets in recent years. By 2023, it had become the second-largest economy in terms of cryptocurrency adoption. In August 2022, Nigeria was identified as the world's most cryptocurrency-focused country based on the volume of Google searches for "cryptocurrency" or "buy crypto."

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