The creation of new rules to improve the licensing, registration, and screening procedures for digital and virtual asset service providers (VASPs) has been announced by the Securities and Exchange Commission (SEC).
The SEC stressed the importance of these steps in preventing people with criminal histories from acting as capital market participants in a notification that was made accessible to THE MATRIX.
The SEC’s circular made clear that these new rules will strengthen the Commission’s commitment to maintaining investor protection and market integrity by supplementing the current regulatory framework.
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The notice also referenced the Commission’s previous actions, notably its treatment and classification of digital assets released in September 2020, delineating 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.
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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 the SEC, is to prevent individuals with criminal backgrounds from being registered as operators within the capital market.
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.
