Lately In The Ecosystem: Why Crypto Companies need Offices
Hmmm 🤔🤔🤔
Hi Dear Innovator 👋
How does the first weekend in July feel like?
Cool, right? 😎
Sit tight, cos it’s about to get even more lit 🤭🤭
SEC is taking a stand…
The securities and exchange commission (SEC) recently announced that virtual asset service providers (VASPs) a.k.a. crypto exchanges, are now mandated to set up an office in Nigeria, before they can operate 🎯An example of one of the big players is Yellow card, which facilitates crypto trading and payments across Africa.
They’ve also insisted that the CEOs/managing partners of these companies must be active in investments and securities, and they need to reside in the country as well.
This is coming on the heels of the recently released ARIP. The Accelerated Regulatory Incubation Program (ARIP) is a special window for onboarding VASPs, which the gives them a license to operate and this temporary license is supposed to suffice while the SEC finalizes the proposed amendments 💼💼 to the SEC Rules on Issuance, Offering Platforms and Custody of Digital Assets.
For the past two years, Nigeria's cryptocurrency regulatory landscape has been in limbo, facing challenges from various regulatory bodies like the SEC, CBN, NSA, and EFCC, and so ARIP offers a temporary solution to this uncertainty, providing clarity and structure to its operators and the necessary regulatory bodies.
The rules to have an office is one of the eligibility requirements and the SEC is doing this because they want to keep a close eye on crypto companies and their users 📊👀
This move for CEOs to be based in Nigeria is all about accountability too. It comes in the wake of the incident involving the now defunct Patricia, where the absence of local offices made it hard to hold founders accountable. Plus, it aligns with the government's efforts to control forex trades affecting the naira’s value. 💱⚖️
What's at Stake? 💸
ARIP participants who don't comply will face fines of at least ₦5,000,000 ($3,276) for the first violation and ₦200,000 ($131) for subsequent penalties💥💰
Typically, the procedure for a VASP license to become fully operative takes 10–13 weeks. However, with the new 30-day ARIP window already effective, companies that have already filed applications with the Commission prior, and those seeking to be registered as VASPs, can obtain approval-in-principle, pending when the Digital Assets Rules become operational. 📜🚀
The cost of the ARIP program, however, comes with a non-refundable ₦2,000,000 ($1,300) fee—plus the original ₦150,000,000 ($98,000) registration fee announced in March—for companies that want to cue in for this program. 💸💼
The ARIP and increased fees could potentially weed out smaller players with malicious intent in the crypto space, centralizing the market among well-funded entities. While this might enhance stability, it could also stifle innovation and limit access for everyday Nigerians. 🌐⚖️
Dear Innovator, do you think this a genuine attempt at creating a regulated crypto environment, or is it a hasty reaction to Nigeria’s crypto powerhouse, which has accounted for over $50 billion in crypto transaction value since 2022? 🤔🏦
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Alsoooo, we know that this is coming to you late. Sorry 🥹🥹
The wonders that the weather and a different time zone 👀 can work when they decide to work together.
Be back on Wednesday. OK?
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