Nigerian Regulator Targets Unlicensed Crypto Platforms
The Nigerian Securities and Exchange Commission (SEC) has announced its intention to enforce regulations on unlicensed crypto platforms operating within the country. This move aims to protect investors, stimulate innovation, and regulate entities currently outside its regulatory framework.
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Emomotimi Agama, the Director-General of Nigeria’s SEC, revealed in a recent statement that business institutions unwilling to comply with the Commission’s guidelines will be prohibited from operating in Nigeria. Agama emphasized, “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.”
This decision follows the recent approval in principle of two crypto exchanges, Quidax and Busha. According to Agama, the decision to approve these platforms aligns with the country’s objective to create an inclusive financial system that caters to the increasing interest in digital assets among the younger population. “It is crucial that we respond to the global trends in digital finance. SEC is committed to ensuring that Nigeria remains competitive and innovative in the global financial markets. We are building the necessary talent and infrastructure to manage the challenges and opportunities that these new asset classes present,” he added.
Strict Regulations to Encourage Market Development
Currently, Quidax and Busha are the only two crypto platforms licensed under the SEC’s regulations. The Commission has received numerous applications from other unregulated crypto exchanges operating in the country. However, Agama clarified that the number of licensed platforms would be determined by their ability to meet the commission’s stringent regulatory standards.
Providing a clear regulatory framework is essential to protect investors while fostering innovation. Agama underscored that full disclosure, anti-money laundering (AML) measures, and combating the financing of terrorism (CFT) protocols are integral components of the SEC’s oversight of the crypto industry.
The Commission is also focused on safeguarding Nigerians from misinformation and fraudulent activities within the digital market space. The SEC suggested that crypto exchanges’ activities must be closely monitored to ensure they do not impede the economy while promoting sector development. “All these we seek to do without hindering innovation because part of our primary responsibility as the SEC is market development,” Agama stated.
The SEC’s Director reassured the Commission’s commitment to ensuring the market operates under clear regulatory guidelines. He also highlighted the need for education and a “guided regulatory framework” to guarantee that crypto investors are well-informed and operate within Nigerian law.
Despite the country’s efforts to develop the growing industry, Nigerian authorities continue to face criticism for their treatment of the detained Binance executive, Tigran Gambaryan. The ongoing Binance vs. Nigeria saga has raised concerns about the country’s measures to enforce the law against the industry. Gambaryan, detained since February, continues to be prosecuted, and his health condition remains critical. The judgment on his bail application is expected on October 9.
As the crypto market evolves, the SEC’s proactive approach aims to ensure that Nigeria remains at the forefront of financial innovation while protecting its investors. This balanced approach is crucial for fostering a safe and dynamic digital asset environment in the country.
