Nigerian Authorities Accelerate Cryptocurrency Provider Registration

The Nigerian Securities and Exchange Commission (SEC) has launched a 30-day program aimed at expediting the registration process for Virtual Asset Service Providers (VASPs). This initiative is designed to bolster compliance and stability within the rapidly expanding Nigerian crypto market.

Earlier this year, the Nigerian SEC revised its Rules on Digital Assets, which included a significant increase in VASP registration fees to 150 million Naira ($100,806). While this fee hike raised concerns about reduced business participation, it was intended to promote financial stability among VASPs.

A Turbulent History

On June 21st, the SEC introduced the Accelerated Regulatory Incubation Program (ARIP), providing a streamlined pathway for Nigerian VASPs to swiftly fulfill all regulatory obligations and ensure full compliance. VASPs are required to complete registration through the SEC ePortal within this 30-day period to avoid potential prosecution.

This initiative coincides with the appointment of Emomotimi Agama as the new director-general of the SEC in April. Agama, known for his supportive stance on cryptocurrencies, has encountered resistance by stakeholders in the Nigerian crypto industry. In May, he initiated efforts against the use of the Nigerian Naira on crypto exchanges, attributing its devaluation partly to this practice, resulting in the Naira being delisted in major exchanges like KuCoin and Binance.

Striking A Balance

In December 2023, the Central Bank of Nigeria lifted a two-year ban on banks maintaining accounts for VASPs, opting for a regulatory approach instead of an outright prohibition. However, microfinance banks are still restricted when it comes to facilitating crypto transactions. The increased registration fees and the ARIP underscore a strict local regulatory approach toward crypto trading and usage.

Nigeria has emerged as a burgeoning crypto hub, with approximately 22 million individuals (10.3% of the population) actively engaged in crypto ownership. The recent measures by the SEC aim to foster a more stable and secure environment for crypto activities. These regulatory adjustments are part of a broader effort by the Nigerian authorities to strike a balance between innovation and security in the crypto sector. By tightening regulations and raising fees, the SEC aims to eliminate unqualified participants and fortify market integrity, crucial for building consumer trust and fostering industry growth.