July 05, (THEWILL) – The Nigeria Securities and Exchange Commission (SEC) has rolled out mandatory requirements (including establishing an office in Nigeria), for crypto firms seeking to operate in the country.
This was contained in a recently released circular, dated June 21, 2024, tagged: “Framework On Accelerated Regulatory Incubation Program (ARIP), For The Onboarding Of Virtual Assets Service Providers (VASPs)”.
In the circular, the SEC directed all operating and prospective VASPs (including crypto brokers/dealers), to visit the SEC ePortal to complete the application process by 30 days from the date of the Circular.
SEC states that while the rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody are going through an amendment process, virtual assets service providers must come under the ARIP for now.
According to the circular entities who can apply for the ARIP are expected to be incorporated and have an office in Nigeria and its Chief Executive Officer/Managing Director or its equivalent shall be resident in Nigeria; be performing investments and securities business; be seeking registration or have pending virtual asset-related applications with the Commission.
The SEC further mandated that an entity seeking to operate within ARIP shall submit a sworn undertaken showing its owner or its firm has not been convicted for fraud or dishonesty within or outside Nigeria, must have an operational plan and a business model which has a clear or unique value proposition or will contribute to the overall development of the capital market.
The applicant is also expected to show satisfactory provisions regarding the protection of investors and public interest, among others.
The processing fee is fixed at N2 million, while applicants must supply evidence of required shareholder funds.
SEC disclosed that the main purpose of ARIP is to accelerate the onboarding of Entities whose applications have been filed with the Commission, and for other potential applicants seeking to be registered with the Commission.
The programme enables “qualified entities” to obtain approval in principle from the Commission pending when the Digital Assets Rules become operational.
Among others, the framework applies to virtual asset service providers and token issuers that carry on business activities in Nigeria or offer services to Nigerian consumers including platforms that facilitate the offering, trading, exchange, custody and transfer of virtual/digital assets.
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