The Nigeria’s Securities and Exchange Commission (SEC) has announced its intention to begin enforcement actions against individuals and business entities, including cryptocurrency exchanges, that operate outside its regulatory framework according to a nairametrics report. This comes as part of its efforts to safeguard investors and ensure compliance within the growing digital asset market.
SEC’s Regulatory Oversight
In a statement released on Sunday, SEC’s Director-General, Dr. Emomotimi Agama, reiterated the commission’s commitment to protecting all investors, including those engaging in cryptocurrency transactions. The announcement follows closely on the heels of the commission granting approval in principle to two cryptocurrency exchanges—Quidax and Busha—the first to receive such recognition under the SEC’s regulations.
With numerous crypto exchanges currently operating in Nigeria, only these two have so far met the SEC’s stringent requirements. Dr. Agama emphasized that any entity wishing to operate in this market must adhere to regulatory standards.
“We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated,” Dr. Agama warned. “For those that do not want to play by the books, we will not allow them to operate within our space.”
Rising Demand and Investor Protection
The SEC’s move is a response to the increasing interest among young Nigerians in digital assets. Dr. Agama explained that the regulator is keen on establishing a robust framework that both protects investors and fosters innovation in the cryptocurrency space.
The commission’s regulatory oversight includes enforcing key protocols such as full disclosure, anti-money laundering (AML) measures, and combating the financing of terrorism (CFT) standards. These are deemed essential for maintaining transparency and security within the sector.
“It is vital that investors are protected through proper regulation and that innovation is not stifled,” Agama stated.
Strict Compliance for Crypto Exchanges
Dr. Agama further revealed that the SEC has received a significant number of applications from exchanges seeking approval. However, he clarified that only exchanges meeting the SEC’s high regulatory standards would be granted registration.
The SEC is also focused on preventing misinformation and fraudulent activities within the digital asset market. According to Dr. Agama, the operations of crypto exchanges must be closely monitored to ensure they do not negatively affect Nigeria’s economy.
“Our goal is to regulate without hindering innovation because market development is a key responsibility of the SEC,” he said, stressing the need for education and a guided regulatory framework to ensure participants are well-informed and compliant with the law.
The SEC’s actions underscore its commitment to maintaining a secure and regulated environment for cryptocurrency trading while fostering the growth of Nigeria’s digital economy.
