The Securities and Exchange Commission (SEC) announced that it has developed new procedures for registration, screening and licensing of digital and virtual assets service providers (VASPs).

According to the Central Bank of Nigeria (CBN), VASPs are organisation that practice exchanges between virtual assets (cryptocurrencies) and fiat currencies, and transfers of virtual assets.

In a notice seen by The Cable dated March 4, 2024, the SEC added that the new measures would ensure that “criminals are not registered as operators” in the capital market. The CBN had lifted the ban on crypto transactions in the country on December 22, 2023, and issued operational guidelines on virtual assets service providers (VASPs) to all banks and other financial institutions (OFIs).

Following the SEC system, the new guidelines will serve as additional rules and regulations to the existing ones.

“In September 2020, the Commission released its treatment and classification of digital assets where it specified its regulatory purview over Crypto tokens traded on a recognised exchange, Utility tokens traded on a recognized exchange, security tokens that have features of securities and funds and derivatives of these three types of tokens” the circular read.

The broad requirement for virtual asset service providers (VASPs), the issuing of digital assets as securities, digital asset offering platforms (DAOPs), the digital asset exchange (DAX), and digital asset custodians (DACs) were all outlined by the SEC in the May 2022 rules.