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The guidelines issued by the Central Bank of Nigeria (CBN) for Virtual Assets Service Providers (VASPs) provide a comprehensive framework for the regulation of virtual assets in the Nigerian financial sector. Here's a summary of the key aspects, including permissible activities, exclusions, and compliance requirements:

Permissible Activities:

1. Opening of Designated Accounts: Financial Institutions (FIs) are allowed to open accounts specifically designated for virtual/digital asset transactions.

2. Settlement Services: FIs can provide settlement accounts and services for virtual asset transactions.

3. FX Flow Channels: Acting as channels for foreign exchange flows and trade related to virtual assets.

4. Other CBN-Approved Activities: Any additional activities permitted by the CBN over time.

Exclusions:

1. Digital Representations of Fiat Currencies: The guidelines exclude digital representations of fiat currencies, like USDT and USDC (stablecoins), which are covered under other regulations.

2. Securities and Other Financial Assets: Digital assets that fall under existing financial asset regulations are not included.

Compliance Requirements for VASPs:

1. Licencing: VASPs must have a valid license issued by the Securities and Exchange Commission (SEC).

2. Documentation for Account Opening: This includes evidence of SEC licensing, company incorporation documents, details of directors and principal officers, and other corporate information.

3. Restrictions on Account Use: Accounts must be used exclusively for virtual/digital asset transactions, with specific restrictions on cash withdrawals and third-party transactions.

4. AML, CFT, and CPF Policies: VASPs must adhere to Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing policies.

5. Risk Management Systems: Establish systems to identify and mitigate risks related to money laundering, terrorism financing, and proliferation financing.

6. Customer Due Diligence (CDD): Implement and maintain robust CDD procedures, especially for significant transactions or changes in customer information.

7. Record Maintenance: Keep comprehensive transaction records for at least five years.

8. Reporting: Regular reporting of account activities to the CBN, including transaction volumes, values, and any incidents of fraud or theft.

9. Operational and Transactional Limits: Establish and adhere to transaction limits based on risk assessment criteria.

Not Permissible:

1. Non-Designated Account Operations: FIs are prohibited from using non-designated accounts for virtual asset transactions.

2. Concessions on Designated Accounts: No concession agreements or arrangements are allowed for designated accounts.

3. Interest on Designated Settlement Accounts: These accounts shall not be interest-bearing.

4. FX Transfers for VASP Transactions: Prohibition on facilitating foreign exchange transfers from VASP transactions to foreign accounts.

5. Misuse of Designated Accounts: Strict adherence to the intended use of designated accounts is mandatory