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Re-registration Requirement: The Nigerian SEC has given crypto firms a 30-day deadline to re-register under a new regulatory regime. This includes firms offering digital asset services, exchanges, and custodians, who must comply with these new rules or face enforcement actions.
Increased Registration Fees: As part of the new regulations, the SEC has significantly increased the fees for crypto firms. The registration fee for digital asset exchanges has been raised from 30 million naira (approximately $18,620) to 150 million naira (roughly $93,000). Other costs, such as application and processing fees, have also substantially increased.
Local Office Requirement: All crypto firms must establish regional offices in Nigeria. This move is part of the SEC’s efforts to enhance oversight and ensure compliance with local regulations. Establishing local offices is expected to improve regulatory monitoring and foster a more secure and transparent crypto market.
The Nigerian Securities and Exchange Commission (SEC) recently announced a new regulation requiring all cryptocurrency firms operating in Nigeria to establish local offices.
SEC Nigeria announced on its website that entities must be incorporated and have an office to qualify for the Accelerated Regulatory Incubation Programme (ARIP), designed to onboard virtual asset service providers (VASPs) in Nigeria. The post suggested that the managing director or CEO must reside in the country.
Applicants must be engaged in investment and securities business and either seek registration or have pending applications related to virtual assets with the SEC. This directive marks a significant shift in the regulatory landscape for the Nigerian crypto market, which a mix of innovation and regulatory uncertainty has characterised.
The Nigerian SEC’s mandate to establish local offices represents a substantial change for the crypto industry. In a circular issued on June 21 2024, the SEC instructed all current and future VASPs, such as crypto brokers and dealers, to finalise their applications through the SEC ePortal within a 30-day timeframe. This move is seen as a bid to bring more oversight and stability to the sector, which has been rapidly growing in Nigeria.
Opportunities:
Challenges:
VASPs are required to operate under the ARIP while the rules on digital assets issuance offering platforms, exchange, and custody are being amended. The SEC revealed that the ARIP plans to accelerate the onboarding process for entities seeking SEC registration, providing temporary approval in principle until the Digital Assets Rules are fully operational.
The SEC’s mandate is to regulate the crypto industry and harness its potential to drive economic and technological advancements in Nigeria.
Economic Growth:
Technological Innovation:
Nigeria’s regulatory approach to crypto has evolved significantly over the years. The new mandate for local offices is part of a broader strategy to regulate and integrate the crypto market into the national economy.
Regulatory Evolution:
Future Prospects:
The Nigerian SEC’s decision to mandate local offices for crypto firms marks a significant milestone in the country’s regulatory journey. While it presents challenges for the industry, it also offers numerous opportunities for growth, economic development, and technological advancement. As Nigeria continues to refine its approach to cryptocurrency regulation, the country is poised to become a key player in the global crypto market, balancing innovation with the need for oversight and stability.
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