Virtual Assets Service Providers (VASPs) are now required to establish an office within Nigeria to qualify for Nigeria’s Securities and Exchange Commission (SEC) framework program.
The SEC stated in a website post that the Accelerated Regulatory Incubation Programme (ARIP), intended to enroll VASPs in the country, is only available to incorporated entities with an office in Nigeria.
Furthermore, the CEO or Managing Director must be a resident of Nigeria. Applicants must be involved in the investment and securities business and either have outstanding applications related to virtual assets with the SEC or be in the process of seeking registration.
The Securities and Exchange Commission (SEC) issued a circular on June 21 that mandated that all existing and prospective virtual asset service providers (VASPs), including crypto brokers and dealers, submit their applications through the SEC ePortal within 30 days.
Currently, VASPs are obligated to operate under the ARIP while the regulations regarding Digital Assets Issuance, Offering Platforms, Exchange, and Custody are being revised.
The ARIP is designed to expedite the onboarding process for entities pursuing SEC registration, as stated by the SEC. It offers a temporary approval in principle until the Digital Assets Rules are entirely operational.
This framework applies to virtual asset service providers and token issuers conducting business in Nigeria or providing services to Nigerian consumers. This includes platforms facilitating the offering, trading, exchange, custody, and transfer of virtual/digital assets.
Penalties for VASPs
Application requirements consist of a sworn statement that attests to the absence of any convictions for fraud or dishonesty, an operational plan, a business model with a clear value proposition, and provisions for investor protection.
Applicants must submit evidence of the necessary shareholder funds, and the processing fee is 2 million naira ($1,277). Quarterly financials, compliance reports, incident reports, and weekly and monthly trading statistics are due from ARIP participants.
The Securities and Exchange Commission (SEC) has indicated that penalties for noncompliance with ARIP requirements may commence at 5 million naira ($3,194) and escalate by 200,000 ($127.76) per day for each subsequent default.
Other digital investment platforms, such as crypto brokers and advisers, are subject to sanctions of at least 10 million naira ($6,388). Unregistered commercial VASPs are subject to penalties of at least 20 million naira ($12,776).
Nigeria’s Securities and Exchange Commission (SEC) proposed an amendment to the regulations that govern platforms that provide cryptocurrency services in March. The proposed amendment would increase the registration charge for crypto exchanges from 30 million naira ($18,620) to 150 million naira ($93,000).
