The Nigerian securities regulator said on June 21 that it had amended the digital asset rules to expand their scope and introduced an accelerated process for onboarding virtual asset service providers. The Accelerated Regulatory Incubation Programme provides VASPs with insights into the Commission’s expectations before they fully commence operations.
Nigerian Regulator Amends VASPs Rules; Threatens Enforcement Against Noncompliant Entities
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Regulator Threatens Enforcement Action Against Non-Compliant VASPs
The Nigerian Securities and Exchange Commission (NSEC) is amending rules that govern virtual asset service providers (VASPs) to “expand the scope of regulation in line with current realities.” As part of this effort, the NSEC has introduced the Accelerated Regulatory Incubation Programme (ARIP) for onboarding VASPs.
In a circular issued on June 21, the NSEC directed all operating and prospective VASPs to visit its e-portal and complete the application process within 30 days. Failure to comply with these directives will result in enforcement action by the regulator.
The 13-page ARIP framework says the objective of this program is to expedite the onboarding of entities that have submitted applications to the Commission. It allows applying entities to receive approval in principle from the NSEC while awaiting the operationalization of the Digital Assets Rules.
ARIP to Assist the Commission in Understanding Digital Asset Business Models
Additionally, the ARIP provides VASPs with insights into the Commission’s expectations before they fully commence operations.
“It will also provide an opportunity for the Commission to further understand the digital asset business models in order to enhance its regulations to ensure it adequately address issues surrounding market integrity, investor protection and money laundering,” the ARIP framework document said.
Meanwhile, the NSEC also discloses the penalties it is set to impose on non-compliant ARIP participants. For instance, the Commission stipulates that non-compliant VASPs shall be liable to a penalty of not less than $3,370 (NGN 5,000,000) at the first instance. An additional penalty of approximately $134 will be imposed for every day of default.
For commercialized VASPs operating without authorization, the NSEC said a penalty of no less than $13,500 will be imposed. Brokers, market makers, and advisers operating without authorization will be asked to pay a fine of no less than $6,750, the Commission said.
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