The Nigerian Securities and Exchange Commission (SEC) is set to crack down on unregulated cryptocurrency businesses, aiming to protect investors and promote innovation in the nation's booming digital asset market.
The Nigerian Securities and Exchange Commission (SEC) is preparing to take action against businesses and individuals engaged in unregulated cryptocurrency transactions, as part of its commitment to safeguarding investors and promoting responsible innovation in the digital asset sector.
On September 9, Emomotimi Agama, Director-General of Nigeria’s SEC, revealed the authority’s intent to enforce regulations against entities providing cryptocurrency services without proper oversight. Agama emphasized that the initiative is aimed at protecting the growing number of Nigerian investors interested in digital currencies. 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.”
Limited Number of Regulated Crypto Exchanges in Nigeria
This announcement follows the SEC’s decision to issue provisional licenses to two local cryptocurrency exchanges, Busha Digital and Quidax Technologies, at the end of August 2024. These two exchanges are currently the only platforms in Nigeria officially overseen by the SEC.
While additional businesses related to digital assets have received approval, Busha and Quidax stand out as the only regulated exchanges in the country, reflecting the increasing interest in cryptocurrency among Nigeria’s youth. Agama further highlighted the necessity of a clear regulatory framework that supports innovation while ensuring investor protection. He also mentioned that the SEC will enforce compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures.
Regulatory Inconsistencies in Nigeria’s Crypto Space
Nigeria’s regulatory approach to cryptocurrency has faced criticism for being inconsistent. Despite the country’s role as one of the leading crypto markets globally, its policies have fluctuated over the years. In 2021, the Central Bank of Nigeria (CBN) imposed a blanket ban on financial institutions from engaging with crypto exchanges. In response, the SEC developed a regulatory framework for digital assets, and by late 2023, the CBN lifted the ban, though it introduced new restrictions in May 2024, limiting peer-to-peer crypto exchanges using the Nigerian naira.
Global exchanges such as Binance have also been impacted by Nigerian regulatory actions. In 2024, despite Binance’s decision to exit the Nigerian market, law enforcement continued to detain key executives, including the company’s head of financial crime compliance, who has remained in custody for over six months awaiting bail decisions.
