The Nigerian Securities and Exchange Commission (NSEC) has announced new rules for virtual asset service providers (VASPs) operating in the country. The regulatory body aims to expand its scope and introduce an accelerated process for onboarding VASPs. The move comes as the NSEC seeks to enhance its regulatory framework to address issues surrounding market integrity, investor protection, and money laundering.

The new rules, outlined in a 13-page framework, introduce the Accelerated Regulatory Incubation Programme (ARIP). This programme provides VASPs with insights into the NSEC's expectations before they commence operations. The ARIP also allows applying entities to receive approval in principle from the NSEC while awaiting the operationalization of the Digital Assets Rules. The programme aims to assist the Commission in understanding digital asset business models and enhance its regulations.

All operating and prospective VASPs have been directed to visit the NSEC's e-portal and complete the application process within 30 days. Failure to comply will result in enforcement action by the regulator. The NSEC has also outlined penalties for non-compliant VASPs, including a minimum fine of approximately $3,370 for the first instance and an additional penalty of around $134 for every day of default.

The NSEC's move to tighten its grip on VASPs is seen as a positive step towards regulating the digital asset space in Nigeria. The new rules and ARIP programme demonstrate the Commission's commitment to ensuring that VASPs operate in a safe and secure environment. As the digital asset market continues to evolve, regulatory bodies like the NSEC must adapt and innovate to address emerging risks and challenges.

In conclusion, the NSEC's new rules and ARIP programme mark a significant milestone in Nigeria's digital asset regulatory journey. By providing a clear framework for VASPs, the Commission aims to promote investor protection, market integrity, and anti-money laundering measures. As the digital asset space continues to grow, regulatory bodies like the NSEC must remain vigilant and proactive in their approach to regulation.