Nigeria’s SEC is set to apply regulations on unlicensed cryptocurrency businesses with the goal of safeguarding investors and promoting innovation in the expanding market.
The Securities and Exchange Commission (SEC) of Nigeria intends to initiate enforcement proceedings against entities and individuals engaged in unregulated cryptocurrency activities.
Emomotimi Agama, the director-general of Nigeria’s SEC, declared that Nigeria would take action against organizations offering cryptocurrency services without appropriate regulation, as reported by local news agency Nairametrics on Sept. 9.
Agama stressed that these measures are in line with the SEC’s commitment to protecting investors, including those participating in the cryptocurrency industry. He stated:
“We are definitely going to take enforcement actions against anyone looking to operate in this market without the intention of being regulated. For those who do not want to comply with the regulations, we will not permit them to operate within our jurisdiction.”
Currently, only two cryptocurrency exchanges are regulated in Nigeria.
The statement from the SEC comes approximately two weeks after the Nigerian securities regulator granted the first provisional operating licenses to two local cryptocurrency exchanges, Busha Digital and Quidax Technologies, on Aug. 29.
While there are several other SEC-approved businesses involved in digital assets in Nigeria, Busha and Quidax are presently the only two exchanges officially supervised by the authority, according to its website.
According to Agama, the recent approvals of Busha and Quidax in Nigeria were influenced by the increasing interest in digital assets among young Nigerians. The official emphasized the necessity for a clear regulatory framework that protects investors while fostering innovation.
He mentioned that the SEC’s oversight of cryptocurrency will encompass verifications related to Anti-Money Laundering and Combating the Financing of Terrorism protocols.
Inconsistencies and a lack of clarity in Nigeria’s cryptocurrency regulations
Observers in the industry concur that Nigeria’s approach to regulating cryptocurrency transactions has been somewhat unclear and inconsistent despite its emergence as one of the world’s major cryptocurrency markets.
In early 2021, the Central Bank of Nigeria (CBN) prohibited all financial institutions from providing services to cryptocurrency exchanges in the country, effectively imposing a blanket ban on cryptocurrency. A year later, the Nigerian SEC published a regulatory framework targeting cryptocurrency exchanges.
