The Nigeria Securities and Exchange Commission (SEC) has brought in fresh regulations for virtual asset service providers (VASPs), making it compulsory for them to have a physical presence in the country within its regulatory framework.
According to a recent announcement, VASPs must become incorporated entities and maintain offices within Nigeria as a condition for being part of the Accelerated Regulatory Incubation Programme (ARIP), aimed at enabling crypto-based businesses to fit into Nigeria’s regulatory environment.
In addition to the local presence requirement, the SEC has mandated that the CEO or managing director of these firms must reside in Nigeria so as to enable the enhancement of accountability and regulation of cryptocurrency activities in Nigeria.
The SEC has set a 30-day deadline for existing and prospective VASPs, including crypto brokers and dealers, to complete their applications through the SEC ePortal. Successful applicants under the ARIP framework will receive temporary approval to operate while the Digital Assets Rules are being finalized.
The application process requires firms to submit sworn statements, detailed operational plans, and business models that prioritize investor protection. In addition, a processing fee of 2 million naira (approximately $1,277) is also required for application submission.
To ensure ongoing compliance, the SEC has implemented a comprehensive reporting system. ARIP participants are required to submit weekly and monthly trading statistics, quarterly financial reports, and incident reports as needed.
The commission has also established significant penalties for non-compliance. Unregistered commercial VASPs may face fines of at least 20 million naira ($12,776), while other digital investment platforms could incur penalties of 10 million naira ($6,388) or more.
The new regulations apply to all VASPs and token issuers conducting business in Nigeria or offering services to Nigerian consumers, including platforms that facilitate the offering, trading, exchange, custody, and transfer of digital assets.
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