A representative from Web3 in Nigeria named Kue Barinor Paul has said that in order to meet the financial obligations imposed by the SEC, it is probable that VASPs and Nigerian crypto exchanges would have to combine.
Rume Ophi, a crypto analyst based in Nigeria, has argued that the state’s Securities and Exchange Commission (SEC) should reevaluate its virtual asset services provider (VASP) regulations in order to facilitate the licensing of local crypto exchanges.
Ophi told Cointelegraph that the current SEC rules for VASP registration aren’t good for local crypto exchanges and that attention should have been on local exchanges when the rules were being made.
The SEC issues VASP licenses to exchanges when they pay the registration fee, fulfill the application processing criteria, and pay any additional costs that may be relevant.
Ophi suggested that international exchanges will dominate operations in Nigeria rather than local ones due to the fact that many local exchanges lack the 500 million naira ($556,620) needed for initial capital.
Kue Barinor Paul, a legal representative from Web3 in Nigeria, agreed with Ophi during a chat on X that Ophi sponsored, saying that in order to pay for the SEC license, Nigerian crypto exchanges and VASPs would probably have to combine.
According to Paul, the present regulations in Nigeria are primarily beneficial to international exchanges; thus, the Securities and Exchange Commission (SEC) should reconsider its approach to license registration.
The Nigerian Securities and Exchange Commission (SEC) released a 54-page document entitled “New Rules on Issuance, Offering Platforms, and Custody of Digital Assets” in May 2022. Nigerian banks and financial institutions already have a framework in place for dealing with digital assets, and this paper paves the way for them to do so.
In order to make sure the SEC’s license criteria are reasonable given the state of the Nigerian economy, Ophi said that the National Assembly of Nigeria should step in.
According to a worldwide poll that included people from fifteen different countries, the most cryptocurrency-savvy people live in Nigeria, the biggest economy in Africa. Chainalysis’ “2023 Cryptocurrency Geography Report” ranked 154 nations based on their crypto adoption rates, with Nigeria coming in at number two.
There was hope that the country’s strong crypto usage rate would entice more crypto investment from outside. Ophi cites the recent lifting of the ban on financial institutions providing services to cryptocurrency exchanges as the cause of the low investment rate.
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