Regulatory Sandbox Established by Nigeria's SEC for Cryptocurrency Businesses
In a move aimed at fostering compliance and promoting growth within the burgeoning cryptocurrency market, the Securities and Exchange Commission (SEC) of Nigeria has set a 30-day ultimatum for virtual asset service providers (VASPs) to register under the Accelerated Regulatory Incubation Program (ARIP).
This development is part of a broader regulatory update under the Investments and Securities Act (ISA) 2025, which establishes a clear legal framework for crypto assets, recognising them as securities, and defines comprehensive rules for their licensing, custody, and operation.
The SEC is providing a special window for VASPs to be registered temporarily under ARIP, with the hope that these companies will smoothly transition into formal registration when the time expires. The SEC's new director general, Emomotimi Agama, has been actively engaging with players in the crypto ecosystem in Nigeria, outlining the conditions that these VASPs must fulfill before they can be registered under ARIP.
The Nigerian government has been cracking down on cryptocurrencies in recent months, with the SEC's digital asset rules yet to be enforced. However, it's important to note that the Central Bank of Nigeria issued a directive permitting banks to open accounts for crypto companies last December, a significant shift from earlier restrictive policies.
The SEC has also not yet banned cryptocurrencies from Nigeria, contrary to some recent speculations. In fact, the processing fee for registration under ARIP is N2,000,000 (roughly $1,350), indicating a commitment to facilitating the entry of VASPs into the formal regulatory framework.
The SEC has also outlined stringent measures to combat fraud, particularly Ponzi schemes, with a N20 million (roughly $13,500) fine for any VASP operating without registration. These measures are part of the SEC's efforts to protect consumers and foster responsible innovation within the crypto industry.
The SEC's regulatory stance under the ISA 2025 and CBN policy marks a shift from restrictive or ambiguous past policies towards structured compliance and industry growth. This balanced approach is aimed at nurturing one of the world’s largest and fastest-growing crypto markets while ensuring investor protection.
The SEC is currently working on amending its existing guidelines on digital assets, signalling its commitment to evolving with the dynamic nature of the crypto industry. As the regulatory landscape continues to evolve, it is expected that the crypto industry in Nigeria will continue to thrive, providing exciting opportunities for both local and international players.
- The Securities and Exchange Commission (SEC) of Nigeria has set a 30-day ultimatum for fintech startups operating in the cryptocurrency market, specifically virtual asset service providers (VASPs), to register under the Accelerated Regulatory Incubation Program (ARIP).
- The SEC's new director general, Emomotimi Agama, has been actively engaging with players in the crypto ecosystem, outlining the conditions that VASPs must fulfill before they can be registered under ARIP.
- The processing fee for registration under ARIP is N2,000,000 (roughly $1,350), indicating a commitment to facilitating the entry of VASPs into the formal regulatory framework, a move aimed at fostering one of the world’s largest and fastest-growing crypto markets, such as Nigeria.
- The SEC's regulatory stance marks a shift towards structured compliance and industry growth, aiming to nurture the burgeoning finance and technology business sector while ensuring investor protection.
