Nigeria’s Securities and Exchange Commission (SEC) has implemented a new requirement for virtual asset service providers (VASPs), stating that they must establish a physical presence in Nigeria in order to be eligible for the Accelerated Regulatory Incubation Programme (ARIP). The SEC announced that VASPs must be incorporated and have an office in Nigeria, while the CEO or managing director must reside in the country. Applicants must also be engaged in investment and securities business and either seek registration or have pending applications related to virtual assets with the SEC. In a circular issued on June 21, the SEC instructed all existing and prospective VASPs, including crypto brokers and dealers, to submit their applications through the SEC ePortal within 30 days. While the regulations regarding digital assets issuance, offering platforms, exchange, and custody are being amended, VASPs are required to operate under the ARIP. The SEC explained that the ARIP aims to expedite the registration process for entities seeking SEC approval, offering a temporary approval in principle until the Digital Assets Rules are fully operational. This framework applies to VASPs and token issuers conducting business in Nigeria or providing services to Nigerian consumers, including platforms that facilitate the offering, trading, exchange, custody, and transfer of digital assets. The application requirements include a sworn statement confirming no history of fraud or dishonesty convictions, an operational plan, a business model with a clear value proposition, and provisions for investor protection. Applicants must also pay a processing fee of 2 million naira ($1,277) and provide evidence of the required shareholder funds. ARIP participants are expected to submit weekly and monthly trading statistics, quarterly financials, compliance reports, and incident reports. The SEC warned that failure to comply with ARIP requirements may result in penalties starting at 5 million naira ($3,194), with daily increases of 200,000 naira ($127.76) for continued non-compliance. Unregistered commercial VASPs could face penalties of at least 20 million naira ($12,776), while other digital investment platforms, such as crypto brokers and advisers, could be fined at least 10 million naira ($6,388). Earlier this year, the SEC proposed an amendment to the rules governing platforms offering crypto services, including an increase in the registration fee for crypto exchanges from 30 million naira ($18,620) to 150 million naira ($93,000).
Nigerian SEC Requires Crypto Firms to Establish Local Offices