- Nigeria’s SEC will implement rigorous rules on crypto businesses without licences.
- Only two crypto exchanges in Nigeria are currently controlled by the SEC.
- Binance exits Nigeria due to tough laws and compliance challenges.
Nigeria’s Securities and Exchange Commission has announced a clampdown on unspoiled cryptocurrency corporations, aiming to protect investors and stabilise the country’s digital asset market. The SEC’s decisive action points its commitment to ensuring compliance and buyers integrity as the cryptocurrency industry continues to grow.
SEC’s Push for Compliance in the Crypto Market
Emomotimi Agama, the SEC’s director-general, has made it clear that the body will enact rigorous laws on unregulated entities. “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. This statement underscores the SEC’s dedication to maintaining order and protecting investors from the risks associated with unregulated activities.
Currently, only two digital coins trades in Nigeria, Busha Digital and Quidax Technologies, are officially regulated by the SEC. These exchanges received their provisional operating licenses on August 29, marking a essential step in the SEC’s efforts to bring clarity and stability to Nigeria’s digital asset market.
Inconsistencies in Nigeria’s Administrative Environment
The country’s approach to digital currency standards has been characterised by variations that have caused disorientation among industry participants. In early 2021, the Central Bank of Nigeria placed a blanket limit on crypto investments. This restriction prevented monetary structures from servicing crypto platforms, leading to widespread disruption. However, in 2022, the SEC introduced a oversight framework to provide some clarity for the business. Despite these efforts, the supervisory surroundings remained dispersed and unclear.
Moreover, the CBN lifted its ban on cryptocurrency operations in late 2023. However, this decision was quickly followed by new standards in May 2024, restricting peer-to-peer crypto exchanges using the Nigerian naira. These rapid changes have made it challenging for businesses to navigate the legislative scenery and raised concerns about the sustainability of Nigeria’s cryptocoin sales.
Challenges for Global Cryptocurrency Exchanges
The evolving regulatory surroundings in the country have also posed essential challenges for global virtual currency exchanges. Binance, a leading international swap, announced its exit from the Nigerian trade in March 2024. This decision was a direct result of the governing difficulties that made it increasingly difficult for the company to continue its operations.
Besides, Binance’s head of financial crime compliance, Tigran Gambaryan, remains in detention following his arrest in February. Gambaryan has been held for over six months, with a court decision on his bail expected in October. Consequently, the SEC’s enforcement actions reflect its broader mission to create a secure and transparent environment for cryptocurrency trading in the country.
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