Nigeria's SEC to Enforce Regulations on Unregulated Crypto Businesses

Nigeria’s Securities and Exchange Commission (SEC) has announced plans to take enforcement actions against businesses and individuals engaging in unregulated cryptocurrency transactions.

This initiative aims to protect investors and foster innovation within the burgeoning digital asset market.

Emomotimi Agama, the SEC's director-general, emphasized the importance of operating within a regulated framework. “We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated,” Agama stated.

He reiterated the commission's commitment to ensuring compliance among cryptocurrency service providers.

Currently, there are only two cryptocurrency exchanges in Nigeria. Busha Digital and Quidax Technologies are officially regulated by the SEC. These exchanges received provisional operating licenses on August 29, following a period of inconsistent regulatory measures in the country.

While the SEC regulates these entities, it has also highlighted the need for checks related to Anti-Money Laundering and Combating the Financing of Terrorism protocols.

The SEC's recent actions come in the wake of a complex regulatory landscape in Nigeria. In early 2021, the Central Bank of Nigeria (CBN) imposed a blanket ban on cryptocurrency transactions, prohibiting financial institutions from servicing crypto exchanges.

Although the CBN lifted the ban in late 2023, it introduced new regulations in May 2024 aimed at restricting peer-to-peer crypto exchanges using the national currency, the naira.

The regulatory environment has also affected global exchanges; Binance announced its exit from Nigeria in March 2024, following actions from local regulators.

Notably, the head of financial crime compliance for Binance, Tigran Gambaryan, has been detained since February as he awaits a court decision on bail, which is expected in October.