The Nigerian Securities and Exchange Commission (SEC) has released new regulations geared to Virtual Asset Service Providers (VASPs). 

An amendment of the Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody, issued in May 2022, the SEC has now introduced the Accelerated Regulatory Incubation Program (ARIP). 

It comes with the appointment of the SEC’s new Director-General, Emomotimi Agama.

VAPS must comply with the framework by 21 July 2024. The SEC issued a press release regarding the same, stating, “The Securities and Exchange Commission [“the Commission”] hereby notifies the general public, that the Rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody is going through an amendment process.”

About the reason for the amendment, the release read, “The purpose of the amendment is to expand the scope of regulation in line with the current realities.” 

It also instructed VASPs about their next steps, “By this Circular, all operating and prospective VASPs are hereby directed to visit the SEC ePortal to complete the application process no later than 30 days from the date of this Circular.”

The SEC also strictly stated that any VASPs operating without undergoing the registration process within the following month will witness enforcement action, which may include bans and fines. 

Nigeria is one of the leaders in crypto adoption as its population has taken to the asset class in droves due to the instabilities its national currency undergoes. Bitcoin is a favorite in the region.

Nigeria also introduced a retail Central Bank Digital Currency (CBDC) not too long ago, but that move was denounced and criticized largely by its population. 

The Nigerian people think the CBDC is a way for the government to tap into the crypto trend and control how people transact and hold value again.

However, the new move by the SEC looks to strengthen Nigeria’s crypto ecosystem and protect its users instead of the country going for an outright ban. 

Time will tell how effective the new regulations will be for crypto innovation in the region.