The Nigerian SEC mandates local offices for crypto companies
The Nigerian Securities and Exchange Commission (SEC) has introduced new requirements for Virtual Asset Service Providers (VASPs), requiring them to establish an office in Nigeria that qualifies for the framework program.
In a website post, the SEC said entities must be incorporated and have an office in Nigeria to qualify for the Accelerated Regulatory Incubation Program (ARIP) designed to onboard VASPs in the country.
CEOs must live in the area
In addition, the CEO or Managing Director must reside in Nigeria. Applicants must be engaged in investment and securities business and either seeking registration or have pending applications related to virtual assets with the SEC.
In a June 21 circular, the SEC directed all existing and prospective VASPs, including crypto brokers and dealers, to complete their applications through the SEC ePortal within 30 days.
VASPs will be required to operate under the ARIP as regulations on the supply, delivery platform, exchange and protection of digital assets are evolving.
According to the SEC, ARIP aims to expedite the on-boarding process for entities seeking SEC registration. It provides temporary approval in principle until the Digital Assets Regulations are fully implemented.
This framework applies to virtual asset service providers and token issuers doing business in Nigeria or providing services to Nigerian consumers, including the provision, trading, exchange, storage and transfer of virtual/digital assets.
Penalties for non-compliance with VASPs
Application requirements include an affidavit confirming convictions for fraud or dishonesty, an action plan, a business model with clear values and investor protection provisions.
Related: Honesty of Nigerian traders restores confidence in crypto
The processing fee is 2 million naira ($1,277), and applicants must provide proof of required shareholder funds. ARIP participants are expected to submit weekly and monthly transaction statistics, quarterly financials, compliance reports and risk reports.
The SEC stated that failure to comply with ARIP requirements could result in fines starting at 5 million naira ($3,194) and increase by 200,000 ($127.76) per day for continued default.
Unregistered commercial VASPs face a fine of at least 20 million naira ($12,776), while other digital investment platforms such as crypto brokers and advisors face a fine of at least 10 million naira ($6,388).
In March, Nigeria's SEC proposed an amendment to the rules governing platforms offering crypto services, which proposed raising the registration fee for crypto exchanges from 30 million naira ($18,620) to 150 million naira ($93,000).
Magazine: US law enforcement agencies are turning up the heat on crypto-related crimes.
