Nigeria’s Securities and Exchange Commission (SEC) has introduced new requirements for virtual asset service providers (VASPs).

From now on, these providers must have a physical office in Nigeria to be eligible for the Accelerated Regulatory Incubation Programme (ARIP).

Establish an office in the country

According to a recent notice on the SEC’s website, companies that want to participate in ARIP, a program designed to support VASPs in Nigeria, must both be incorporated in Nigeria and have an office in the country. In addition, the company’s CEO or managing director is required to be a resident of Nigeria.

Applicants must be in the investment and securities industry and either be applying for a new registration or have pending applications with the SEC regarding virtual assets. The SEC announced in a circular dated June 21 that all existing and prospective VASPs, including crypto brokers and dealers, must submit their applications through the SEC ePortal within 30 days.

VASPs must operate under the ‘ARIP’ program for the time being

While the rules for digital asset issuance, offering platforms, exchanges, and custody are being revised, VASPs must operate under the ARIP for the time being. This program is intended to expedite the onboarding process for entities seeking SEC registration and provides temporary approval until the new Digital Assets Rules are fully operational.

The framework applies to VASPs and token issuers doing business in Nigeria or offering services to Nigerian consumers. This includes platforms involved in the listing, trading, exchange, custody and transfer of digital assets.

Filing of affidavit

To apply, entities must submit an affidavit confirming that there are no convictions for fraud or dishonesty, as well as an operational plan, a business model with a clear value proposition and investor protection provisions. The application processing fee is 2 million naira (approximately €1,213) and applicants must provide evidence of the required shareholder funds.

ARIP participants are expected to submit weekly and monthly trading statistics, quarterly figures, compliance reports and incident reports. Failure to comply with ARIP requirements can result in fines starting at 5 million naira (approximately €3,033), with daily increments of 200,000 naira (approximately €119) for persistent non-payment.

Fines of at least 20 million naira

Unregistered commercial VASPs face fines of at least 20 million naira (approximately €12,134), while other digital investment platforms, such as crypto brokers and advisors, could face fines of at least 10 million naira (approximately €6,067).

In March, Nigeria’s SEC proposed a change to crypto service provider rules, proposing an increase in crypto exchange registration fees from 30 million naira (approximately $18,201) to 150 million naira (approximately $91,000).


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