The Securities and Exchange Commission (SEC) has introduced fresh guidelines to manage the licensing, registration and screening of digital and virtual assets service providers (VASPs).
The Central Bank of Nigeria (CBN) defines VASPs as platforms that handle transfers of virtual assets and also conduct exchanges between virtual assets (cryptocurrencies) and fiat currencies.
The new manual is now referred to as the Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) onboarding manual.
According to the SEC, the new guideline aims to stop individuals with criminal backgrounds from obtaining licenses as operators within the capital market.
“The SEC has also developed a new AML/CFT/CPF AML/CFT/CPF onboarding manual for licensing/registration and ongoing screening of Digital and VASP beneficial owners to ensure that criminals are not registered as operators in the capital market.
“The SEC is ready to interface with genuine VASPs based on these clear rules and regulations.” the body noted
Two years after prohibiting crypto trading in the country, the CBN in December 2023 lifted the ban and introduced some operational guidelines on virtual assets service providers (VASPs) for all banks and other financial institutions (OFIs) titled ‘Guideline On Operations Of Bank Accounts For Virtual Assets Service Providers (VASPs)'
The action, however, did not permit banks and other financial institutions to hold, trade, or transact in virtual currencies on their account.
The new guidelines, according to the SEC, will complement the initial regulatory framework, reinforcing the regulatory body’s commitment to ensuring market integrity and investor protection.
SEC further added that it was ready to interface with genuine VASPs based on set rules and regulations and that based on the recent engagement with CBN, “additional comments are being incorporated into the rules that will soon be exposed to the market for comment before final approval”.
The introduction of new rules to further regulate crypto trading comes amid the FG’s recent efforts to curb illegal crypto trading in the country.