The Securities and Exchange Commission (SEC) of Nigeria has indicated that not all cryptocurrency companies seeking registration will meet the necessary requirements for approval. Dr. Emotimi Agama, SEC’s Director-General, conveyed this during a meeting with applicants involved in the Regulatory Incubation (RI) and Accelerated Regulatory Incubation Programme (ARIP), the Commission’s two regulatory pathways for crypto operators in Nigeria.
Recently, the SEC granted approval-in-principle to two crypto exchanges, Quidax and Busha, allowing them to operate as legally recognized exchanges in Nigeria under the ARIP program. The Commission also noted that several other applications are under review. However, Dr. Agama acknowledged that it would be challenging to ensure all applicants achieve registration, stating, “Certainly, not all of them will meet the requirements. The commission will keep providing clarity to some knotty areas to assist in the process.”
Dr. Agama emphasized the SEC’s dedication to transparency and integrity in crypto regulation, assuring stakeholders of a level playing field for all applicants. He noted that while the Commission understands the eagerness for regulation, it remains cautious to ensure inclusivity. “Registration goes beyond onboarding and registering; it requires monitoring, education, and surveillance, and all of these are continuous,” he explained. He also highlighted the importance of stakeholder input, indicating that rules would be amended to incorporate valid points, making the regulatory framework comprehensive.
Expressing Nigeria’s readiness to lead in crypto regulation, Dr. Agama stated, “We are trying to ensure that at the end of the day, as a country we will stand out in the regulation of this space. Beyond any doubt, this space is the future and for us as Nigerians, we have embraced it.” He clarified that the SEC is not slow in its processes but is thorough to ensure fairness in its pronouncements. Looking ahead, he mentioned that in the coming year, the Commission aims to expedite its delivery and announcements, having learned from the current process. He also referenced a new law in the process of obtaining Presidential assent, designed to provide the legal framework required to properly regulate the crypto space and guide operators.
These developments come amid Nigeria’s significant engagement with cryptocurrencies. A 2020 online survey indicated that 32% of participating Nigerians used cryptocurrencies, with the country ranking third globally in total cryptocurrency transaction volume at that time. The Central Bank of Nigeria (CBN) has historically expressed caution regarding cryptocurrencies, instructing commercial banks in 2017 to desist from cryptocurrency transactions. Despite this, the crypto market in Nigeria has continued to grow, prompting regulatory bodies like the SEC to establish frameworks to oversee and guide the industry’s development.