Nigeria SEC Announces Crackdown on Unlicensed Crypto Firms

Nigeria’s Securities and Exchange Commission (SEC) has announced plans to take enforcement action against unregulated cryptocurrency firms operating in the country.

The move comes as part of the nation’s efforts to establish a clear regulatory framework for the growing digital asset market.

Emomotimi Agama, the SEC’s Director General, stated in a recent announcement that the commission will begin enforcing regulations on businesses and individuals involved in unregulated cryptocurrency transactions.

“We are certainly going to commence enforcement actions on anyone who wants to operate in this market and does not have the intention of being regulated,”  – Agama said.

The SEC’s decision follows the recent issuance of provisional operating licenses to two local crypto exchanges, Busha Digital and Quidax Technologies, on August 29, 2024.

These two exchanges are currently the only ones officially supervised by the Nigerian SEC, according to the regulator’s website.

Agama emphasized that the SEC’s actions are aimed at protecting investors while also fostering innovation in the cryptocurrency sector.

He noted that the recent approvals for Busha and Quidax were driven by young Nigerians’ growing interest in digital assets. The SEC’s supervision of crypto firms will include checks related to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) protocols.

Nigeria’s approach to regulating cryptocurrency has been inconsistent in recent years. In early 2021, the Central Bank of Nigeria (CBN) imposed a ban on crypto by prohibiting financial institutions from servicing crypto exchanges.

This ban was officially lifted in late 2023, but the CBN subsequently introduced new regulations aimed at restricting peer-to-peer crypto exchanges using the Nigerian naira in May 2024.

The country’s regulatory landscape has also seen some high-profile cases involving global crypto exchanges. Binance, one of the world’s largest cryptocurrency exchanges, announced its exit from Nigeria in March 2024.

However, some of its executives, including Tigran Gambaryan, the head of financial crime compliance, remain detained by Nigerian authorities. Gambaryan has been in custody for over six months and is currently awaiting a court decision on bail, expected in October.

The SEC’s latest announcement signals a more proactive approach to regulating the crypto industry in Nigeria. Agama stated that the commission seeks to achieve its regulatory goals “without hindering innovation because part of our primary responsibility as the SEC is market development.”

Industry observers note that Nigeria has emerged as one of the world’s major crypto markets, despite the regulatory challenges.

Source: moneycheck.com

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