Nigeria’s regulatory body overseeing securities is introducing fresh regulations for virtual asset service providers (VASPs) operating within the nation. These regulations are aimed at bolstering supervision and governance of the cryptocurrency sector, particularly focusing on entities facilitating the trading, exchange, and transfer of virtual assets.
The Nigerian Securities and Exchange Commission (SEC) has put forth several proposals, one of which mandates that VASPs must be registered in Nigeria and maintain a physical office in the country. Moreover, the CEO or managing director of these entities must be based in Nigeria, ensuring local presence and accountability. The proposed amendments also cover foreign or non-resident operators targeting Nigerian users either directly or through intermediaries.
This widened scope underscores the SEC’s intent to regulate all platforms engaged in virtual asset activities within Nigeria’s jurisdiction. However, the SEC has clarified exemptions for certain entities, such as technology firms offering infrastructure or software to digital asset exchanges, and financial portals aggregating content and providing links to financial websites.
This targeted approach aims to streamline regulations while allowing supportive services to function without undue restrictions. The timing of these proposed changes aligns with Nigeria’s efforts to exert control over foreign cryptocurrency exchanges, which authorities believe have contributed to the rapid depreciation of the local currency.
Recent measures, such as directives to block specific digital asset platforms and the detainment of senior executives from a prominent crypto exchange, reflect Nigeria’s stance on enforcing regulatory compliance within the crypto sphere. Strategically, the Nigerian SEC has broadened the mandate from the prior requirement for foreign crypto exchanges to establish local offices.
This shift signals a more comprehensive approach to regulatory oversight, stressing the importance of compliance across various functions within digital asset entities. Concurrently, the SEC has adjusted the fees associated with crypto licence applications. The proposed fee hikes, including a fivefold increase in registration fees, indicate the regulator’s intention to strengthen resources for effective oversight and enforcement.
Stakeholders and industry players have been given an opportunity to provide feedback on these proposed amendments. The SEC has set a deadline for receiving comments, encouraging dialogue and collaboration between regulators and the crypto community to ensure a balanced and efficient regulatory framework.
In summary, Nigeria’s proposed regulatory adjustments for virtual asset service providers represent a proactive move toward reinforcing oversight, promoting accountability, and fostering a healthy and compliant crypto ecosystem within the country’s regulatory framework. These measures are essential for bolstering investor confidence, safeguarding consumers, and mitigating risks associated with digital asset activities.