Nigeria SEC to Crack Down on Unregulated Crypto Transactions

The Nigerian Securities and Exchange Commission (SEC) announced it was going to immediately initiate criminal charges against both individuals and businesses responsible for prohibited digital currencies transactions. 

This is an element of the nation’s continuous endeavors to ensure adequate regulation and guard investors in the growing demand for digital assets.

The Securities and Exchange Commission director-general, Emomotimi Agama, stated that the agency was going to investigate companies delivering cryptocurrency services without the required authorization. 

Source: Twitter

This action is in compliance with Nigeria’s regulatory framework, which defends investment interests and encourages innovation. Agama emphasized that entities operating without proper authorization will not be tolerated.

He noted, “For those that do not want to play with the books, we will not allow them to operate within our space.”

This announcement follows the recent provisional operating licenses issued to two local cryptocurrency exchanges, Busha Digital and Quidax Technologies, on August 29. 

These two platforms are now officially under SEC supervision. While Nigeria has seen the emergence of several other SEC-approved digital asset businesses, Busha and Quidax are the only two exchanges currently under full oversight.

The younger cohort in Nigeria is becoming increasingly interested in digital assets, which is evident in the decision to give these licenses. 

Agama highlighted the necessity of a transparent regulatory system that promotes innovation and defends investors from potential threats.

Businesses that operate within the cryptocurrency space are bound by the laws drafted by the Securities and Exchange Commission (SEC) which involve maintaining watch on commitment to the laws governing the Financing of Terrorism (CFT) and Anti-Money Laundering (AML) laws.

Nigeria is an important contender worldwide in the digital currency market, but securing legal certainty has proven problematic.

The Federal Reserve of Nigeria, also known as the CBN, restricted financial organizations from delivering digital currency trading solutions in the year 2021.

This caused uncertainty, especially given how common bitcoin trading is in the country at large.The CBN revoked this prohibition in 2023, permitting bitcoin transactions. 

But in the month of 2024, new laws began to take action that limited collaborative cryptocurrency exchanges that used the naira, the legal currency of Nigeria. 

Nigerian regulators have also been diligently examining foreign cryptocurrency exchanges like Binance, which is indication of the nation’s ongoing attempt to control the rapidly growing sector.

The Securities and Exchange Commissioner of Nigeria has devoted itself to maintaining a regulated cryptocurrency market. The commission aims to safeguard investors and ensure the industry’s future viability by seeking legal actions against unlicensed operators.