Nigeria’s SEC to Launch Enforcement Actions Against Unregulated Crypto Activities
Crypto News: Nigeria’s Securities and Exchange Commission (SEC) has announced plans to take enforcement actions against businesses and individuals involved in unregulated cryptocurrency transactions. This move, revealed by Emomotimi Agama, the Director-General of Nigeria’s SEC, signals a strong stance from the regulatory body against entities operating outside the framework of official oversight.
Speaking to local news agency Nairametrics on September 9, Agama emphasized the SEC’s commitment to protecting investors, including those participating in the crypto market. “We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated,” Agama stated. “For those that do not want to play by the books, we will not allow them to operate within our space.”
Regulatory Landscape Tightens Around Crypto in Nigeria
The announcement follows the SEC’s recent issuance of the first provisional operating licenses to two local cryptocurrency exchanges, Busha Digital and Quidax Technologies, on August 29. These approvals mark a significant development in Nigeria’s approach to regulating the rapidly growing crypto market, driven largely by young Nigerians’ increasing interest in digital assets.
According to the SEC, Busha and Quidax are currently the only two exchanges officially regulated in Nigeria. While other businesses involved in digital assets have received SEC approval, these two exchanges are the sole entities under direct supervision. The regulatory framework is designed to protect investors by ensuring compliance with key standards, including Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) protocols.
Agama noted that the SEC’s recent actions aim to balance investor protection with the need to encourage innovation in the digital asset space. “It is essential to provide a clear regulatory framework that both protects investors and fosters a conducive environment for innovation,” he added.
Inconsistencies in Nigeria’s Crypto Regulations
Despite these recent steps towards regulation, Nigeria’s approach to cryptocurrency transactions has been criticized for its inconsistency and lack of clarity. The country has emerged as one of the world’s major crypto markets, but its regulatory stance has fluctuated significantly over the past few years.
In early 2021, the Central Bank of Nigeria (CBN) imposed a blanket ban on crypto, prohibiting all financial institutions from servicing crypto exchanges. However, the SEC released a regulatory framework targeting crypto exchanges just a year later, indicating some level of acceptance for such activities.
Further adding to the confusion, the CBN officially lifted the ban on transacting in cryptocurrencies in late 2023 but then proposed new regulations in May 2024 to restrict peer-to-peer crypto exchanges using the Nigerian naira.
Global Exchanges Under Scrutiny
The stringent regulatory environment in Nigeria has also affected global exchanges like Binance. Despite Binance announcing its exit from Nigeria in March 2024, local authorities have maintained strict measures against its executives. Notably, Tigran Gambaryan, Binance’s head of financial crime compliance, has been detained for over six months following his arrest in February 2024. His court decision on bail is expected in October.
As Nigeria continues to grapple with how to effectively regulate its burgeoning cryptocurrency market, the SEC’s latest announcement underscores its intent to clamp down on unregulated activities while promoting a more transparent and compliant crypto ecosystem. The coming months are likely to reveal more about the enforcement actions and how they will shape the future of crypto in one of Africa’s largest economies.