The Security and Exchange Commission Nigeria (SEC), has published the Proposed New Rules and Amendments for December, 2024, that would take effect from June 30th, 2025.
Following the ban on Crypto Exchanges in Nigeria, many enthusiasts have been expectantly waiting for the new regulations as proposed by the Security and Exchange Commission (SEC) earlier in the year.
The committee’s new law under the Emomotimi Agama led administration is designed to create standards that encourage ethical practices and ultimately make for a fair and efficient market.
For this strategy to work effectively, the SEC has adopted a three point objective to regulate innovation, that is backed on safety, market deepening, and providing solutions to problems. First, every crypto platform or Virtual Assets Service Provider (VASP) has to be registered with a license from the Nigerian SEC before carrying out any promotion on social media, TV, or Print.
The rules are majorly targeted but not limited to Virtual Asset Service Providers (VASP). Which includes any person that carries out blockchain investment-based activity or marketing of businesses that involves trading, exchange transfer and custody of digital assets in Nigeria.
Digital Assets Token Offerings(DATOs), Initial Coin Offerings (ICOs), Security Token Offerings (STO), and other Blockchain-based offers digital assets within Nigeria or directly targeted at Nigerian investors shall be regulated following the release of this new law.
The new law states that a VASP shall have a Board, whose membership shall be a minimum of Five(5), and whose members will first be approved before the registration of the business at the CAC. It states also that 60% of the Board members must be of Nigerian Origin for the board to be approved.
The new law also aims at restructuring the operations of Crypto social media influencers. The law says that crypto influencers must announce to their community when they are paid to promote a digital asset or a service. Marketers and social media influencers are warned against using ambiguous words in their promotion contents.
These ambiguous words or high-sounding phrase includes “invest and secure your future”, “top offer”, “superior offer”, “brighter future”, “double your earnings now”etc. Failure to follow this new law would attract a fine of N10 million naira and a 3 years jail term.
Top stakeholders in the Nigerian crypto space have welcomed this development as a positive step in sanitizing the Nigerian crypto space and getting rid of the bad practices carried out by a few of the “bad eggs”. Currently, two Nigerian owned Crypto exchanges, Busha and Quidax, have received their licenses from the Nigerian SEC enabling a new phase of regulation in the Nigerian crypto space.
