CBN Releases Guidelines For Regulating Virtual Assets In Nigeria (FULL LIST)

The guidelines, which were issued to all banks and other financial institutions on Friday, December 22, 2023, stipulate conditions for opening an account by virtual assets providers. 

As part of the conditions to open an account for a VASP, the Guidelines stipulate that a designated account can only be opened with the approval of senior management of the financial institution. 

“Any application for opening a designated account by a company providing virtual/digital services under these Guidelines shall be supported by the following documents: 

• Evidence of a valid licence issued by the Securities and Exchange Commission (SEC) for the entity to engage in the business of VASP/DAX/DAOP. 
• Certified true copy of the memorandum and article of association. 
• Certified true copy Form CAC2-Statement of share capital and return of allotment of shares. 
• Certified true copy Form CAC 2.1 particulars of secretary. 
• Certified true copy Form CAC 3- notice of registered address. 

• Certified true copy of Form CAC 7-Particulars of Directors 
• Verifiable registered address of the company  
• copy of Certificate of Capital Importation (CCI) (where applicable) 
• Valid means of identification of all the directors, principal officers and beneficial owners of the company. 
• BVN of all the directors, principal officers and beneficial owners of the company. 
• Home address of all the directors, principal offices and beneficial owners of the company.” 

Glamtush recalls that the CBN had in February 2021 issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers in view of the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations as well as the absence of regulations and consumer protection measures. It, however, noted that the latest Guidelines supersede the 2021 circular.  

FATF’s guidelines 

The CBN’s guidelines take a cue from the 2019 recommendations of the Financial Action Task Force (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against threats such as money laundering and terrorist financing,  

At the end of its Plenary Week in Orlando, Florida on June 22, 2019, the FATF announced that it had adopted and issued “an Interpretive Note to Recommendation 15 on New Technologies,” which clarifies the amendments to the international standards relating to crypto assets and describes how countries must comply with relevant recommendations. 

The body advised countries to assess and mitigate the risks associated with virtual asset activities and service providers and implement sanctions and other enforcement measures when service providers fail to comply with their AML/CFT obligations.

They are also required to “license or register service providers and subject them to supervision or monitoring by competent national authorities,” and “will not be permitted to rely on a self-regulatory body for supervision or monitoring.”