Nigerian Regulator Targets Unlicensed Crypto Platforms

Nigeria's SEC recently stated its intentions to enforce regulations on unlicensed crypto platforms. The Commission aims to protect investors, boost innovation

The Nigerian Securities and Exchange Commission (SEC) has announced its plan to enforce strict regulations on all unlicensed individuals and business entities operating in the country, including crypto platforms.

The institution recently revealed its intentions to enforce regulations on unlicensed crypto platforms. The Commission aims to protect investors, boost innovation, and regulate entities outside its regulatory framework.

As reported by local media outlet Nairametrics, Emomotimi Agama, the Director-General of Nigeria’s SEC, shared in a statement on Sunday that business institutions that don’t want to follow the Commission’s guidelines will not be permitted to operate in the country:

“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.”

The decision comes after the recent approval in principle of two crypto exchanges, Quidax and Busha. The SEC’s Director stated that the decision to approve the platforms stemmed from the country’s “need to create an inclusive financial system” that considers the growing 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.”

The two recently approved exchanges are the only two crypto platforms licensed under the SEC’s regulations. Agama stated that the Commission has received “numerous applications” from the unregulated crypto exchanges operating in the country.

Strict Regulations To Encourage Market Development

Despite this, the SEC’s Director clarified that the number of licensed platforms “would be determined by their ability to meet the commission’s strict regulatory standard.” He noted that it’s indispensable to provide a clear regulatory framework that “protects investors while encouraging innovation.”

Agama also highlighted that full disclosure, anti-money laundering (AML) measures, and combating the financing of terrorism (CFT) protocols are key components of the SEC’s oversight of the crypto industry.

Per the report, the Commission is also working to safeguard Nigerians from misinformation and fraudulent activities within the digital market space. Moreover, the SEC suggested that crypto exchanges’ activities must be closely monitored “so they do not impede the economy” while encouraging the sector’s development.

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

The SEC’s Director reassured the Commission’s commitment to ensure the market operates under clear regulatory guidelines. Lastly, he emphasized the need for education and a “guided regulatory framework” to guarantee that crypto investors are well-informed and operate within Nigerian law.

It’s worth noting that, despite the country’s “vision” to develop the growing industry, Nigerian authorities continue to receive backlash for their treatment of the detained Binance executive, Tigran Gambaryan.

As reported by Bitcoinist, the Binance vs. Nigeria saga has raised the alarm about the country’s measures to enforce the law against the industry. Gambaryan, who’s been detained since February, continues to be prosecuted while his health condition remains critical. The judgment on his bail application will be delivered on October 9.