Nigeria’s Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have concluded plans to offer guidelines for Cryptocurrency operators in the country.
The new set of guidelines issued by SEC and the CBN will regulate the licensing, registration and screening of digital and virtual assets service providers (VASPs).
SEC in a notice dated March 4, 2024 said the new measures would ensure that “criminals are not registered as operators” in the capital market.
According to the CBN, VASPs are entities that carry out exchanges between virtual assets (cryptocurrencies) and fiat currencies, as well as the transfer of virtual assets.
The CBN had prohibited Nigerian banks from facilitating cryptocurrency transactions and ordered the closure of all accounts linked to crypto exchanges.
The CBN lifted the ban in December. Weeks after, the government began an intense scrutinisation of crypto exchanges and their roles in the sliding value of the naira.
While lifting the ban, CBN issued operational guidelines on VASPs to all banks and other financial institutions.
According to a statement by the CBN, the new guidelines are meant to serve as additional rules and regulations to the already existing ones.
“In September 2020, the Commission released its treatment and classification of digital assets where it specified its regulatory purview over Crypto tokens traded on a recognised exchange, Utility tokens traded on a recognized exchange, security tokens that have features of securities and funds and derivatives of these three types of tokens” the communique read.
“SEC outlined the existing guidelines issued in May 2022 to include; general requirements for VASPs, issuance of digital assets as securities, digital assets offering platforms (DAOPs), digital assets exchange (DAX), and digital asset custodians (DACs).
“In May, 2022 and April, 2023, SEC AML/CFT/CPF Regulations were amended and issued with the following specific requirements on VASPs: a. CDD/KYC for VASPs; b. The Travel Rule; c. STRs Rendition; and d. Record Keeping.
“In April 2023, procedures for implementing targeted financial sanctions on terrorist individuals and entities was issued.
“The SEC has also developed a new AML/CFT/CPF AML/CFT/CPF onboarding manual for licensing/registration and on-going screening of Digital and VASP beneficial Owners to ensure that criminals are not registered as operators in the capital market.”
According to the circular, SEC is now ready to interface with genuine VASPs but that would be dependent on these clear rules and regulations.
“Based on the recent engagement with the CBN, additional comments are being incorporated into the rules that will soon be exposed to the market for comment before final approval,” SEC stated.
“Relevant rules and regulations issued on the regulation of digital assets and VASPs have been collated for use by potential applicants and the public.”
Meanwhile, world’s largest Cryptocurrency company, Binance said on Tuesday that it will discontinue its naira services, days after two of its officials were detained in Nigeria.
Binance also told its Nigerian users to either withdraw their naira deposits, trade their assets denominated in the currency or convert their naira holdings into crypto before the discontinuation comes into effect on Friday, March 8, 2024.
