Nigeria’s SEC to begin crackdown on unregulated crypto exchanges, others 

The Securities and Exchange Commission (SEC) has said it would soon commence enforcement actions against all individuals and business entities, including crypto exchanges operating in the country outside its regulations.

The Director-General of SEC, Dr. Emomotimi Agama, stated this in a statement released on Sunday, emphasizing that the commission is determined to protect all investors.

This is coming barely two weeks after the capital market regulator granted approval in principle to two crypto exchanges in the country, Quidax and Busha. While there a number of exchanges operating in the country, these two exchanges are the first and only ones currently under SEC’s regulation.

Stern warning  

While stressing the Commission’s commitment to protecting investors, including those involved in the cryptocurrency space, the SEC DG said:

“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.” 

• He noted that the recent approval of two cryptocurrency exchanges was a move driven by the increasing interest of young Nigerians in digital assets.

• According to Dr. Agama, it is essential to provide a clear regulatory framework that protects investors while encouraging innovation.

• He highlighted the importance of full disclosure, anti-money laundering (AML) measures, and combating the financing of terrorism (CFT) protocols as essential components of the SEC’s oversight in the crypto space.

Strict regulation of crypto exchanges 

Agama disclosed that the SEC had received numerous applications for crypto exchanges but clarified that the number of registered exchanges would be determined by their ability to meet the commission’s strict regulatory standards.

• He said the commission is also taking steps to safeguard citizens from misinformation and fraudulent activities in the digital market space.

• According to him, the activities of crypto exchanges must be closely monitored so they do not impede the economy.

• While encouraging innovation, the SEC remains committed to ensuring that the market operates within clear regulatory guidelines.

“All these we seek to do without hindering innovation because part of our primary responsibility as the SEC is market development,” Agama stated. 

He emphasized the need for education and a guided regulatory framework to ensure that participants in the crypto space are well-informed and operate within the law.

What you should know 

Nigeria’s SEC on August 29 announced that it had granted an Approval-in-Principle to two crypto exchanges Quidax and Busha, giving them the status of legally recognised crypto trading platforms in the country.

• The two exchanges were approved under the Accelerated Regulatory Incubation Program (ARIP) program of the Commission.

• In addition to that, the Commission also admitted four companies to test their models and technology under its Regulatory Incubation (RI) Program.

• The four firms are digital assets offering platforms, which include Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExhange.NG Ltd.
• The SEC noted that the listed above firms are not the only entities that have applied to ARIP and the RI Program.  It added that other applications received are being assessed and would be granted approval in principle on a case-by-case basis as they meet all its requirements.