As a researcher with a background in finance and experience in following regulatory developments in emerging markets, I find the recent announcement by the Nigerian Securities and Exchange Commission (SEC) regarding new guidelines for Virtual Asset Service Providers (VASPs) to be an important step towards regulating and strengthening Nigeria’s crypto ecosystem.

The Nigerian Securities and Exchange Commission (SEC) has unveiled fresh regulations specifically designed for Virtual Asset Service Providers (VASPs), marking an update to the Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody from May 2022. This development follows the appointment of Emomotimi Agama as the new Director-General of SEC. The new initiative is called the Accelerated Regulatory Incubation Program (ARIP).

As a crypto investor, I understand that VAPS has been given until July 21, 2024, to comply with the SEC’s framework for digital assets issuance, offering platforms, exchanges, and custody. The SEC recently announced this update in a press release, explaining, “The Securities and Exchange Commission hereby informs the public that we are currently undergoing an amendment process for the Rules on Digital Assets.”

Regarding the rationale behind the amendment, the communique stated, “The intention of the amendment is to broaden the regulatory reach in accordance with present-day circumstances.” In addition, it ordered Virtual Asset Service Providers (VASPs) to take action, “Through this Circular, all current and intending VASPs are required to proceed to the SEC ePortal to finalize their application procedures within thirty days of the Circular’s issuance date.”

The Securities and Exchange Commission (SEC) has issued a stern warning that any Virtual Asset Service Providers (VASPs) failing to register with the commission within the upcoming month will face regulatory action. Such actions may include prohibitions and fines. Nigeria stands out as one of the world’s frontrunners in cryptocurrency adoption, with its populace rapidly embracing digital assets due to economic instability affecting their national currency. Among these digital currencies, Bitcoin enjoys significant popularity within the region.

Nigeria recently launched a retail Central Bank Digital Currency (CBDC), which has been met with criticism from its populace. Many Nigerians believe that this move is an attempt by the government to capitalize on the cryptocurrency craze and regain control over transactions and value storage.

The SEC’s latest action is expected to bolster Nigeria’s cryptocurrency sector while safeguarding its citizens, rather than imposing a complete ban on crypto activities. It remains to be seen how impactful these regulations will be on crypto development within the region.

Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay

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2024-06-23 22:17