Nigeria: SEC says some VASP applicants don’t meet requirements

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Nigeria stepped up its digital asset regulations in 2024, requiring that all VASPs obtain a new license from the securities regulator. Now, the watchdog has hinted that it may disqualify some of the applicants as they have not met its standards.

The Securities and Exchange Commission (SEC) issued its first two licenses to Busha Digital and Quidax, two local exchanges, in September. Director Emomotimi Agama revealed at the time that the agency was reviewing dozens of other applications.

Speaking recently at an industry event, Agama noted that not every applicant will obtain the license.

“Certainly, not all of them will meet the requirements. The commission will keep providing clarity to some knotty areas to assist in the process,” he stated, as reported by local outlet Nairametrics.

The SEC has been working with some of the applicants to bring them up to standard, Agama added. He further assured the industry that the agency is taking its oversight role seriously, emphasizing the critical role that registration plays.

“Registration goes beyond onboarding and registering; it requires monitoring, education, and surveillance, and all of these are continuous…we are trying to ensure that at the end of the day, as a country, we will stand out in the regulation of this space,” he stated.

Beyond registration, the SEC recently proposed a new law targeting ‘crypto’ influencers to “curb the menace” of social media promotions. Agama revealed that the new law has received the legislators’ nod and awaits the president’s signature to become law.

The law, proposed as an amendment to the Digital Asset Rules, requires VASPs working with influencers to obtain the SEC’s green light beforehand. In turn, the influencers must ensure that the VASP is licensed and receive a “no-objection authorization” from the watchdog. Violators will face fines of up to $6,400 or up to three years in prison.

The SEC’s regulatory push comes on the back of a year in which Nigerian authorities cracked down heavily on the sector. Led by the economic crimes watchdog, the Economic and Financial Crimes Commission (EFCC), the crackdown saw offshore exchanges like Binance and Coinbase (NASDAQ: COIN) purged. It also led to the arrest of two Binance executives—one escaped detention and is still at large, while the other was released eight months later following pressure from American leaders. 

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