Nigeria SEC Chief Warns Entities Operating Outside of Its Regulatory Purview Will Face Enforcement Actions

The Nigeria Securities Exchange Commission (SEC Nigeria) Chief says the authority will be taking action on entities operating outside of its regulatory purview.

The Securities and Exchange Commission (SEC) of Nigeria has announced plans to take action against entities operating in the digital asset space without regulatory approval.

“We will certainly commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated. Those that do not want to play by the books will not be allowed to operate within our space,” said Dr. Emomotimi Agama, Director-General of SEC Nigeria.

The announcement comes after the SEC granted two digital asset exchanges ‘Approval-in-Principle’ to begin operations under the Accelerated Regulatory Incubation Program (ARIP) on August 29, 2024.

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ARIP itself was announced on June 21, 2024, with the SEC stipulating a 30-day-window within which digital asset operators were required to apply to the program or risk enforcement action. Besides the 2 exchanges, 5 more operators were approved under the program while more applications continue to be considered on a case-by-case basis as they meet all SEC requirements.

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According to Dr. Emomotimi, a self-confessed crypto enthusiast, the local cryptocurrency market is valued at over $400 million with 33.4% of Nigerians using or owning cryptocurrencies. Hence, the move to regulate the virtual assets sector is informed by this growing interest and the need to protect investors.

Dr. Emomotimi also says the sector requires monitoring so that it does not impede the Nigerian economy.

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

The regulatory action adopted by SEC Nigeria is reminiscent of the strategy adopted in South Africa where the Financial Sector Conduct Authority (FSCA) has been issuing licenses to virtual asset service providers on a case-by-case basis.

FCSA has so far granted operating licenses to some 138 firms and is running 30 investigations into unauthorized crypto-related financial services within the country.

“In the interest of protecting the public and in support of fairness in the industry, the FSCA will act decisively against unlawful CASPs. The FSCA will make the outcome of its investigations known and will publish warnings if it discovers unregistered crypto business.”

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According to current crypto regulations, entities that continue operations without applying for registration could face a fine of up to R10 million or even a criminal conviction… pic.twitter.com/ducTAf16Ev

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FCSA has warned that such platforms are facilitating scams with fraudsters using multiple accounts opened at banks at crypto exchanges as part of their fraudulent activities to avoid detection.

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In the same vein, South Africa’s Revenue Service (SARS) has begun issuing tax notices to crypto traders using information obtained from some of the licensed crypto asset exchanges.

🇿🇦REGULATION | The South Africa Revenue Service (SARS) Begins Issuing Tax Notices to Crypto Traders

Failure to provide requested information could be deemed a criminal offense under the Tax Administration Act, the officers say. The national revenue authority has adopted a… pic.twitter.com/NZ5vJJlHZz

— BitKE (@BitcoinKE) September 9, 2024

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