Nigeria is intensifying her attention to the cryptocurrency sector, with the Securities and Exchange Commission (SEC) unveiling new regulations aimed at crypto operators. These measures are part of the country’s broader crackdown on crypto activities, particularly targeting Binance.
The SEC released a document titled ‘Proposed Major Amendment to the Rules on Issuance, Offering Platforms and Custody of Digital Assets,’ signaling adjustments to existing regulations governing the crypto industry. Notably, the revised rules mandate registration with the SEC for any individual or entity providing virtual asset services.
One significant change is the requirement for companies operating as virtual asset service providers (VASP) to be incorporated, and maintain an office in Nigeria. Additionally, the CEOs or Managing Directors of such firms must reside in the country.
The updated regulations also include substantial increases in registration fees for Digital Assets Offering Platforms (DAOPs). Fees have risen sharply, with the registration fee now set at N150 million, up from N30 million previously, and other related fees experiencing similar hikes.
The SEC’s move came amidst Nigeria’s burgeoning digital asset activity driven by factors such as regulatory clarity provided in 2021, and the country ranking as one of Africa’s largest crypto markets.
However, industry operators have raised concerns about certain provisions in the revised regulations. Some argue that requirements like having a physical presence may not align with the operational models of many crypto companies. Others question the increased fees considering the interests of local player, and fear that the market could become dominated by foreign entities.
While acknowledging the SEC’s efforts to provide regulatory clarity, stakeholders in the crypto space believe that further refinement is necessary for the regulations to be more practical and inclusive. They emphasised the importance of striking a balance between regulatory oversight, and fostering innovation within the crypto industry.
