REGULATION | Digital Asset Operators in Nigeria Required to Establish Local Presence in Latest Eligibility Requirements

The Nigeria Security Exchange Commission (SEC Nigeria) requires Virtual Asset Service Providers (VASPs) in the country to establish a local office to be eligible to operate in the country.

This is among the requirements listed in the Framework on Accelerated Regulatory Incubation Program (ARIP) For The Onboarding Of Virtual Assets Service Providers (VASPs).

Earlier in June 2023, as reported by BitKE, SEC Nigeria released a circular directing that all operating and prospective VASPs (including crypto brokers/dealers) should visit the SEC ePortal to complete the application process no later than 30 days from the date of the circular.

REGULATION | Nigeria SEC Issues a Notice for Onboarding VASPs in 30 Days Due to ‘Current Realities’

Following the 30-day-period, the Commission indicated that it would commence enforcement action against any operating VASP that fails to comply with the directives.… pic.twitter.com/ThvMC4MwFQ

— BitKE (@BitcoinKE) June 22, 2024

According to the SEC, the rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody are going through an amendment process, and virtual assets service providers must come under the ARIP for now.

Entities who can apply for the ARIP shall have the following:

Be incorporated and have an office in Nigeria and its Chief Executive Officer/Managing Director or its equivalent shall be resident in Nigeria
Be performing investments and securities business
Be seeking registration or have pending virtual asset-related applications with the Commission

Applicants are required to also show satisfactory provisions regarding the protection of investors and public interest, among others.  The processing fee is fixed at N2 million while applicants must supply evidence of required shareholder funds.  

According to the regulator, ARIP is designed to accelerate the onboarding of entities whose applications have been filed with the Commission, and for other potential applicants seeking to be registered with the Commission. 

It enables ‘qualified entities’ to obtain approval in principle from the Commission pending when the Digital Assets Rules become operational.

The framework applies to virtual asset service providers and token issuers that carry on business activities in Nigeria or offer services to Nigerian consumers including platforms that facilitate the offering, trading, exchange, custody, and transfer of virtual/digital assets. 

Click here to access the full framework with all stipulations.

 

 

 

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