Nigeria gives VASPs 30 days ultimatum to comply with new rules

Nigerian regulators require virtual asset service providers (VASPs) to update their applications within 30 days to comply with new rules regarding digital asset issuance, offering platforms, exchange and the conversation.

Nigeria updates its crypto regulations

The Nigerian Securities and Exchange Commission (SEC) has announced plans to update crucial digital asset regulations in an official statement. notice to the public. The changes aim to strengthen the regulatory framework, ensuring that it is more comprehensive and adaptable to the complexities of digital asset markets.

As part of this regulatory update, the SEC introduced the Accelerated Regulatory Incubation Program (ARIP). This is a specialized compliance initiative designed for Virtual Asset Service Providers (VASPs).

The program provides VASPs with a structured pathway to align with the country’s new regulatory standards.

According to information published on the SEC website websitea dedicated onboarding window has been created to facilitate VASP participation in ARIP.

Additionally, the SEC said it will take enforcement action against any operating VASP that fails to comply with the guidelines outlined in its circular.

This regulatory update is part of Nigeria’s broader initiatives to strengthen oversight of its rapidly expanding cryptocurrency market.

Following the appointment of Emomotimi Agama as the new director general of the SEC. A notable proposal is to increase registration fees for crypto exchanges from 30 million naira ($18,620) to 150 million naira ($93,000).

Alongside these changes at the SEC, the Central Bank of Nigeria (CBN) has issued guidelines governing banking relationships and account operations for virtual asset service providers (VASPs) in the country.

This coordinated effort highlights Nigeria’s commitment to responsibly regulating the virtual asset ecosystem rather than imposing blanket bans.

From prohibition to taxation

Since 2021, Nigeria’s approach to cryptocurrencies has changed significantly. Initially, the central bank banned banks from facilitating cryptocurrency transactions due to concerns about money laundering and terrorist financing.

Despite this ban, cryptocurrency adoption continued to increase, prompting the government to move towards fiscal policy. Here is a timeline:

• February 5, 2021: The Central Bank of Nigeria (CBN) has issued a circular directing banks, non-bank financial institutions and other financial entities to close accounts associated with cryptocurrency transactions within their systems.
• February 9, 2021: The CBN launched a investigation in financial institutions providing services to cryptocurrency traders.
• February 11, 2021: The Senate summoned the CBN and the SEC to discuss the potential impacts of cryptocurrencies on Nigeria’s economy and security.
• February 18, 2021: The International Monetary Fund (IMF) has supported the CBN’s position, highlighting concerns that cryptocurrencies could facilitate illicit activities. On February 22, 2021, the SEC underlines the need to regulate cryptocurrencies.
• February 26, 2021: The CBN clarified his stance, stating that while individuals were not prohibited from purchasing and trading cryptocurrencies, they could not do so through Nigerian banks or fintech platforms.
• April 7, 2022: The SEC officially recognized digital assets as securities and issued comprehensive regulations governing the trading and custody of cryptocurrencies in Nigeria.
• April 15, 2021: Discussions between the SEC and the CBN concerning regulation of cryptocurrencies has continued, as confirmed by the SEC.
• April 26, 2021: The Economic and Financial Crimes Commission (EFCC) has warned Nigerians of the risks of investing in Bitcoin (BTC).
• July 22, 2021: The CBN announced its intention to launch the “eNaira”, a central bank digital currency (CBDC), distinct from Bitcoin and other cryptocurrencies.
• October 25, 2021: Nigeria has become the first African country to introduce its digital currency, “eNaira”.
• December 2, 2022: Zainab Ahmed – Minister of Finance, Budget and National Planning – disclosed provisions of the latest finance bill aimed at imposing taxes on cryptocurrencies and other digital assets.
• May 28, 2023: Former President Muhammadu Buhari sign the 2023 finance bill establishing a 10% tax on capital gains from the sale of digital assets.

Despite regulatory challenges, Nigeria continues to stand out as a global leader in cryptocurrency adoption. The volume of crypto transactions in the country increase by 9% over one year to reach $56.7 billion between July 2022 and June 2023.

Fuente