Regulation in Nigeria: Cryptocurrency Exchanges and Traders to Re-Register
Nigeriaโs Securities and Exchange Commission (SEC) has mandated cryptocurrency exchanges and digital assets traders to re-register their businesses within 30 days to avoid enforcement actions. This move is part of Nigeriaโs efforts to regulate digital assets trading and amend its rules regarding virtual asset service providers (VASPs).
Registration Deadline and Process
- All VASPs, both existing and prospective, must complete the application process on the SEC ePortal within the specified 30-day period.
The Crypto Landscape in Nigeria
- Nigeria, Africaโs most populous country, has a thriving cryptocurrency ecosystem, ranking 11th on the Global Crypto Adoption Index in 2022 despite regulatory challenges.
- In the face of a ban on banks facilitating crypto trading, Nigeria surged to the second position on the index in 2023.
SECโs Skepticism and Warnings
- The SEC, like the Central Bank of Nigeria (CBN), has expressed skepticism towards digital assets and warned against their risks and potential for investment loss.
- Recent warnings from the SEC targeted meme coins like DAVIDO, cautioning investors against questionable crypto projects.
SEC’s Shift Towards Tokenization
- The SEC is embracing tokenization and is set to launch a pilot program for a permissioned liquidity pool involving tokenized bonds and deposits.
- The SEC emphasized that its regulatory efforts are necessary to adapt to the evolving crypto landscape and align with current market conditions.
Overall, the SEC’s stringent approach reflects Nigeria’s commitment to regulatory oversight and investor protection in the rapidly growing cryptocurrency industry.
Hot Take: Nigeria’s Crypto Regulatory Landscape
As you navigate the evolving regulatory environment in Nigeria, ensuring compliance with the SEC’s re-registration requirements is crucial for cryptocurrency exchanges and traders to continue operating within the country’s legal framework and avoid potential enforcement actions.
Sources:
- SEC Framework on Accelerated Regulatory Incubation Program
- Chainalysis Global Crypto Adoption Index 2022
- Chainalysis Global Crypto Adoption Index 2023
- SEC Circular on Binance Nigeria Limited
- SEC Investor Alert on DAVIDO Meme Coin
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