SEC to release new AML rules for digital asset market

Cynthia Ezekwe 

The Securities and Exchange Commission (SEC) has disclosed plans to issue new anti-money laundering (AML) guidelines aimed at enhancing the licensing, registration, and screening processes for digital and virtual asset service providers (VASPs), to prevent  individuals with criminal backgrounds from participating as operators within the capital market.

According to the Central Bank of Nigeria (CBN), VASPs are entities that conduct exchanges between virtual assets (cryptocurrencies) and fiat currencies, and transfers of virtual assets.

SEC, in a circular, stated that the new guidelines are designed to complement the existing regulatory framework, and to reinforce the Commission’s commitment to market integrity and investor protection. 

In September 2020, the SEC released its treatment and classification of digital assets, which specified its regulatory purview over crypto tokens traded on recognised exchanges, utility tokens traded on recognised exchanges, and security tokens that have features of securities. The Commission also classified funds and derivatives of these three types of tokens as falling within its regulatory purview. 

SEC outlined the existing guidelines issued in May 2022 to include; general requirements for VASPs, issuance of digital assets as securities, digital assets offering platforms (DAOPs), digital assets exchange (DAX), and digital asset custodians (DACs).

Based on the recent engagement with CBN, SEC said additional comments are being incorporated into the rules that will soon be revealed 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