Nigerian SEC requires crypto businesses to have local offices


The requirement also stipulates that petitioners must submit to SEC inspections, audits, and monitoring, as well as report customer complaints and emergent risks.

The Securities and Exchange Commission of Nigeria (SEC) has implemented a new requirement for virtual asset service providers (VASPs) to establish an office in Nigeria in order to qualify for its framework program.

The SEC stated in a post on its website that the Accelerated Regulatory Incubation Program (ARIP) is intended to enroll VASPs in the country and requires that entities be incorporated and have an office in Nigeria.

Furthermore, the CEO or managing director must be a resident of Nigeria. Applicants must be involved in the investment and securities business and either have outstanding applications related to virtual assets with the SEC or be in the process of seeking registration.

The Securities and Exchange Commission (SEC) issued a circular on June 21 that mandated that all existing and prospective virtual asset service providers (VASPs), including crypto brokers and dealers, submit their applications through the SEC ePortal within 30 days.

VASPs are currently obligated to operate under the ARIP, despite the ongoing revision of regulations regarding digital asset issuance, offering platforms, exchange, and custody.

The ARIP is designed to expedite the enrollment process for entities that are pursuing SEC registration, as stated by the SEC. It offers a temporary approval in principle until the Digital Assets Rules are entirely operational.

An operational plan, a business model with a clear value proposition, provisions for investor protection, and a sworn statement confirming no fraud or dishonesty convictions are all required as part of the application process.

Applicants are required to submit evidence of the necessary shareholder funds, and the processing fee is 2 million naira ($1,277). Participants in the ARIP program are required to submit quarterly financials, compliance reports, incident reports, and weekly and monthly trading statistics.

The Securities and Exchange Commission (SEC) has indicated that penalties for noncompliance with ARIP requirements may commence at 5 million naira ($3,194) and escalate by 200,000 naira ($127.76) per day for each subsequent default.

Other digital investment platforms, such as crypto brokers and advisers, are subject to sanctions of at least 10 million naira ($6,388), while unregistered commercial VASPs are subject to penalties of at least 20 million naira ($12,776).

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