Nigeria’s Securities and Exchange Commission (SEC) plans to start enforcement actions against businesses and individuals involved in unregulated cryptocurrency transactions.
Emomotimi Agama, the director-general of Nigeria’s SEC, announced that Nigeria would be taking action against entities attempting to offer cryptocurrency services without proper regulation, according to a report by the local news agency Nairametrics on Sept. 9.
Nigeria’s SEC Director-General Emomotimi Agama. Source: News Central
Agama emphasized that the measures align with the SEC’s commitment to protect investors, including those involved in the crypto industry. He stated:
“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.”
Only two crypto exchanges are currently regulated in Nigeria
The SEC’s statement comes about two weeks after the Nigerian securities regulator issued the first provisional operating licenses to the two local crypto exchanges, Busha Digital and Quidax Technologies, on Aug. 29.
While there are a number of other SEC-approved businesses related to digital assets in Nigeria, Busha and Quidax are currently the only two exchanges officially supervised by the authority, according to its website.
Source: SEC Nigeria
According to Agama, the recent approvals of Busha and Quidax in Nigeria were driven by young Nigerians’ growing interest in digital assets. The official stressed the need for a clear regulatory framework that protects investors while encouraging innovation.
He mentioned that the SEC’s supervision of crypto will include checks related to Anti-Money Laundering and Combating the Financing of Terrorism protocols.
Inconsistency and lack of clarity in Nigeria’s crypto regulations
Industry observers agree that Nigeria’s approach to regulating cryptocurrency transactions has been somewhat unclear and inconsistent despite emerging as one of the world’s major crypto markets.
In early 2021, the Central Bank of Nigeria (CBN) placed a blanket ban on crypto by prohibiting all financial institutions from servicing crypto exchanges in the country. One year later, the Nigerian SEC published a regulatory framework targeting crypto exchanges.
Related: Nigerian state plans to tokenize real estate, boost revenue
In late 2023, the CBN officially lifted the ban on transacting in cryptocurrencies but subsequently pushed new regulations that aim to restrict peer-to-peer crypto exchange using the national currency, the Nigerian naira, in May 2024.
Global exchanges like Binance have also faced action from Nigerian regulators.
Despite Binance announcing its exit from Nigeria in March 2024, local law enforcement did not release its executives, including Binance’s head of financial crime compliance, Tigran Gambaryan.
Gambaryan has been detained for over six months since his arrest in February as he awaits the court’s decision on bail, which is expected in October.