Call for Nigerian SEC to Revise Crypto Licensing Rules Favoring Local Exchanges
Summary:
Crypto analyst Rume Ophi has urged the Nigerian Securities Exchange Commission (SEC) to revise its crypto licensing rules to be more accommodating for local exchanges. He mentioned that the current requirements, including a capital prerequisite of $556,620, bars many local platforms from qualifying, opening the field to foreign exchanges. Backed by Kue Barinor Paul, a legal representative for Nigerian Web3, Ophi called on Nigeria's National Assembly to align the SEC's licensing rules with the nation's economic conditions to facilitate more foreign crypto investment.
Crypto analyst Rume Ophi has called on the Nigerian Securities Exchange Commission (SEC) to reassess its crypto licensing regulations, specifically for virtual asset services providers (VASP). Speaking to Cointelegraph, Ophi voiced his concern that the existing rules were not favourable to home-grown crypto exchanges, arguing that they should have been given precedence in the guideline creation. He pointed out that these exchanges must secure a VASP license from the SEC, a process involving compliance with application stipulations and various fees.
He noted that a capital requirement stumbling block of 500 million naira ($556,620) makes it impossible for many local exchanges to meet the criteria, paving the way for primarily foreign exchanges to dominate the local market. Further backing this view, Kue Barinor Paul, a legal representative for Nigerian Web3, mentioned the potential need for Nigerian crypto exchanges and VASPs to merge to meet the SEC licensing requisites. He emphasised that a revamp of the license registration framework is essential, as the existing parameters favour foreign exchanges predominantly.
In May 2022, Nigeria's SEC unveiled a comprehensive 54-page document titled "New Rules on Issuance, Offering Platforms and Custody of Digital Assets." This outlined protocols on how Nigerian banks and financial institutions can engage with digital currencies, offering a gateway for crypto service providers in the country.
Ophi urged Nigeria's National Assembly to participate in the discussion to ensure the SEC's licensing prerequisites align with the nation's economic realities. He stressed that despite Nigeria boasting the highest cryptocurrency awareness levels globally according to a Chainalysis geography report, the rate of foreign crypto investment remains low. This lack of investment, he said, is due to a recent ban lifted on financial establishments serving crypto exchanges.
Published At
1/27/2024 3:09:35 PM
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