Nigeria’s Securities and Exchange Commission (SEC) intends to initiate enforcement actions against businesses and individuals who engage in unregulated cryptocurrency transactions.
The local news agency Nairametrics reported on September 9 that Emomotimi Agama, the Director-General of Nigeria’s Securities and Exchange Commission (SEC), announced that Nigeria will take action against entities that attempt to offer cryptocurrency services without appropriate regulation.
Agama underscored that the measures are consistent with the SEC’s dedication to safeguarding investors, including crypto industry investors. He declared:
“We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated. For those that do not want to play by the books, we will not allow them to operate within our space.”
Currently, Nigeria regulates only two crypto exchanges
Following the Nigerian securities regulator’s issuance of the initial provisional operating licenses to the two local crypto exchanges, Busha Digital and Quidax Technologies, on August 29, the SEC issued its statement approximately two weeks later.
According to the authority’s website, Busha and Quidax are the sole two exchanges under official supervision. However, numerous other SEC-approved businesses in Nigeria are associated with digital assets.
According to Agama, the recent approvals of Busha and Quidax in Nigeria were motivated by the increasing interest of young Nigerians in digital assets. The official emphasized the importance of establishing a transparent regulatory framework that fosters innovation and safeguards investors.
He stated that the SEC’s oversight of cryptocurrency will encompass assessments concerning anti-money laundering and combating the financing of terroristic protocols.
Unclear and Inconsistent Crypto Regulations in Nigeria
Nigeria has emerged as one of the world’s leading crypto markets, but industry observers concur that the country’s approach to regulating cryptocurrency transactions has been inconsistent and unclear.
In early 2021, the Central Bank of Nigeria (CBN) implemented a comprehensive prohibition on the operation of cryptocurrency exchanges in the country, prohibiting all financial institutions from providing services to these exchanges.
A year later, the Nigerian Securities and Exchange Commission (SEC) released a regulatory framework explicitly addressing cryptocurrency exchanges, suggesting that the SEC had authorized this activity.
The Central Bank of Nigeria (CBN) officially lifted the prohibition on cryptocurrency transactions in late 2023. However, in May 2024, the CBN implemented new regulations to restrict peer-to-peer crypto exchanges using the Nigerian naira, the national currency.
Nigerian regulators have also implemented stringent policies regarding global exchanges such as Binance.
Despite Binance announcing its withdrawal from Nigeria in March 2024, local law enforcement did not release its executives, including Tigran Gambaryan, Binance’s chief of financial crime compliance.
Gambaryan has been in custody for more than six months since his arrest in February, and he is anticipating the court’s decision on parole in October.
