The Securities and Exchange Commission (SEC) has announced the development of new guidelines aimed at enhancing the licensing, registration, and screening processes for digital and virtual asset service providers (VASPs).
In a notice made available to Nairametrics the SEC emphasized that these measures are crucial in preventing individuals with criminal backgrounds from participating as operators within the capital market.
The SEC’s circular highlighted that these new guidelines will complement the existing regulatory framework, reinforcing the Commission’s commitment to ensuring market integrity and investor protection.
Commission’s previous actions
The notice also referenced the Commission’s previous actions, notably its treatment and classification of digital assets released in September 2020, which delineated its regulatory oversight over various types of digital tokens.
Additionally, the SEC reiterated the key provisions outlined in the existing guidelines issued in May 2022.
According to the Commission, these provisions encompass general requirements for VASPs, the issuance of digital assets as securities, the operation of digital assets offering platforms (DAOPs), digital assets exchanges (DAX), and digital asset custodians (DACs).
In April 2023, the Securities and Exchange Commission (SEC) introduced procedures for the implementation of targeted financial sanctions on individuals and entities associated with terrorist activities.
Guidelines Issued
Furthermore, the SEC said it has unveiled a new Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) onboarding manual.
This manual is specifically designed for the licensing, registration, and ongoing screening of beneficial owners of digital and virtual asset service providers (VASPs).
The objective according to SEC is to prevent individuals with criminal backgrounds from being registered as operators within the capital market.
Engagement with CBN
Based on the recent engagement with CBN, SEC said additional comments are being incorporated into the rules that will soon be exposed to the market for comment before final approval.
“For ease of reference relevant Rules and Regulations issued by SEC on the regulation of Digital Assets and VASPs have been collated for use by potential applicants and the public,” it noted.
