Nigerian authorities: New Requirements for Crypto Companies
Date: 2024-07-08 Author: Henry Casey Categories: IN WORLD
Nigeria, one of the leading countries in the use of cryptocurrencies in Africa, is tightening its regulatory measures against cryptocurrency companies. The Nigerian Securities and Exchange Commission (SEC) has announced the launch of the Accelerated Regulatory Incubation Program (ARIP) and introduced new requirements for all virtual asset service providers (VASPs).
The Nigerian SEC developed ARIP to simplify the process of obtaining licenses for cryptocurrency companies and ensure their compliance with local laws. This program is aimed at accelerating the registration and licensing of crypto companies, which will allow them to more efficiently provide their services throughout the country.
One of the key requirements of the ARIP program is the mandatory opening of a local office for all VASPs who wish to obtain rights to provide services in Nigeria. This rule is aimed at improving control and monitoring of the activities of cryptocurrency companies in the country.
Requirements for managerial positions
In addition to opening a local office, the Nigerian SEC requires that management positions in crypto companies be filled by citizens permanently residing in Nigeria. Candidates for these positions must have specialized qualifications related to the investment business or the securities market and be accredited by the regulator.
The accreditation process includes several key steps:
- A sworn statement that there is no criminal record for fraud.
- Operational plan. Crypto companies must provide a detailed plan for their activities.
- Business model with a clear value proposition. Companies must describe how they plan to attract and serve customers.
- Investor protection provisions. An important aspect is ensuring the safety and protection of investors, which should also be reflected in the company documents.
Introduction of tax policy
Recently it became known that the major crypto exchange KuCoin has introduced a new tax policy for its users in Nigeria. On July 8, the exchange began charging a value added tax (VAT) of 7.5% on fees on all customer transactions. This decision reflects Nigeria's desire for stricter tax regulation of the cryptocurrency market.
New regulatory measures introduced by the SEC of Nigeria are aimed at increasing the transparency and security of the cryptocurrency market in the country. Mandatory local offices, strict requirements for management positions and accreditation of crypto companies will help create a more reliable and regulated environment for crypto investors. The introduction of the tax policy also highlights the importance of tax compliance for crypto companies operating in Nigeria.
