The directive by the Nigerian Securities and Exchange Commission (SEC) comes amid growing scrutiny and skepticism about digital assets as the country faces challenges with foreign exchange and economic issues.
Nigeria’s SEC has given cryptocurrency exchanges and digital asset traders a 30-day ultimatum to re-register their businesses, making it clear that legal action will be taken against non-compliance.
VASP Compliance Program Launch and Registration Deadline
The Nigerian Securities and Exchange Commission (SEC) issued a statement on June 21, announcing the official launch of the Accelerated Regulatory Incubation Program (ARIP) for Virtual Asset Service Providers (VASPs). The program aims to update existing digital asset issuance, trading platforms, exchanges and custody service rules to adapt to the latest trends in the industry. The SEC requires all operating and potential VASPs to complete the registration application process through the SEC ePortal within 30 days of the announcement.
Despite the Central Bank of Nigeria (CBN) banning banks from facilitating cryptocurrency transactions for two years, Nigeria’s cryptocurrency adoption has grown significantly, ranking from No. 1 in the previous year, according to the Chainalysis Global Cryptocurrency Adoption Index 2023. 11 moved up to second place.
The SEC's move comes amid growing public scrutiny and skepticism about digital assets. In June 2023, the SEC issued a warning to investors to be wary of fraudulent entities that may abuse the names of exchanges such as Binance, and emphasized the high risks of digital asset investments, including the risk of total loss of investment.
Fiat currency devaluation and cryptocurrency market vitality
Earlier this year, Nigerians increasingly preferred to use digital currencies over the national currency, the naira, prompting authorities to accuse cryptocurrency exchanges, including Binance, of money laundering and disrupting the foreign exchange market. As Nigeria's economy faces difficulties, the popularity of digital currencies has exacerbated the problem of devaluation of the legal currency, prompting the government to implement strict crackdowns on exchanges in the peer-to-peer market.
Nigeria’s Economic and Financial Crimes Commission (EFCC) and the Federal Inland Revenue Service (FIRS) charged Binance executives with tax evasion and money laundering and detained them for a short period of time before the charges were eventually dropped. Despite these challenges, Nigeria’s cryptocurrency market remains active.
The International Monetary Fund (IMF) has recommended that Nigeria implement comprehensive regulation of the crypto industry to address some economic issues. Meanwhile, the Nigerian Securities and Exchange Commission is exploring the tokenization space and plans to trial a licensed liquidity pool that includes tokenized bonds and deposits.
The SEC's move to strengthen regulation demonstrates the urgent need and broad efforts to ensure the integrity and stability of the financial system as digital assets rapidly evolve. #尼日利亚 #加密货币 #合规注册 #注册期限
Conclusion:
The new regulations of the Nigerian SEC require cryptocurrency companies to re-register within 30 days, marking an important step in the country's strengthening of digital asset regulation. This move not only highlights Nigeria's emphasis on the potential of the cryptocurrency market, but also reflects its determination to maintain financial order and investor protection. Despite many challenges, including the depreciation of legal currencies and pressure in the foreign exchange market, Nigeria's cryptocurrency market remains vibrant.
Meanwhile, with the recommendations of the International Monetary Fund (IMF) and the SEC’s exploration of the tokenization space, Nigeria is moving towards building a more robust and transparent financial ecosystem. This move is expected to promote the healthy development of the cryptocurrency industry while ensuring the stability and security of the financial system.
