Nigeria’s SEC to Start Enforcement Actions Against Unregulated Crypto Firms

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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September 10, 2024

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Nigeria’s Securities and Exchange Commission (SEC) is preparing to take enforcement measures against crypto firms operating without regulation.

The move aims to crack down on firms that fail to comply with the country’s regulatory requirements, Emomotimi Agama, the SEC’s Director General, said in a recent interview with local media.

“We will begin enforcement actions against anyone operating in this market without the intention of being regulated,” Agama stated.

Nigeria SEC Begins Issuing Licenses to Exchanges

Although Nigeria has taken a cautious approach to cryptocurrencies, the SEC recently began issuing licenses to compliant crypto firms.

Last month, it granted licenses to cryptocurrency exchanges Quidax and Busha.

Furthermore, the SEC has announced that five other firms have been admitted to test their business models and technologies under the SEC’s Regulatory Incubation Program (RI).

These companies include Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.

The ARIP was established by the SEC to integrate firms that had already begun operations before the issuance of the Rules on Virtual Asset Service Providers in May 2022.

The RI Programme, according to the SEC, is designed to evaluate the business models of digital asset companies and to test innovative products, services, and technologies in a controlled market environment under SEC supervision.

However, the country has previously blocked some exchanges, despite reports of platforms like Coinbase remaining accessible.

In March, the SEC also introduced guidance aimed at preventing criminals from registering as crypto operators.

The regulator’s latest actions come amid an ongoing trial involving the Binance exchange and two of its executives.

One executive, detained for over six months, is reportedly seeking bail due to a severe illness.

However, Agama claimed that the SEC’s enforcement efforts would not stifle innovation but would ensure a secure and regulated environment for the market to thrive.

“All this we seek to do without hindering innovation because part of our primary responsibility as the SEC is market development.”

Binance Legal Drama Could Damage Nigeria’s Reputation

In June, the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) expressed concerns over the ongoing legal disputes between cryptocurrency exchange Binance and the Nigerian government.

BICCoN, which represents the Nigerian blockchain industry, urged a balanced approach to resolving these issues, noting the potential implications for the country’s blockchain ecosystem and international reputation.

The ongoing legal battles and detention of Binance executives have created an atmosphere of uncertainty and risk, potentially deterring potential investors and partners, according to BICCoN President Lucky Uwakwe.

Just recently, US lawmakers French Hill and Chrissy Houlahan made a visit to Kuje Prison in Nigeria, where detained Binance executive Tigran Gambaryan is being held.

Hill described Gambaryan’s wrongful detention in what he called a “horrible prison,” bringing attention to the health concerns Gambaryan is facing while in custody.

On June 14, there was a court ruling that cleared Gambaryan and Anjarwalla of tax evasion charges.

However, despite being cleared of tax evasion charges, the Binance executive still has a separate money laundering case to deal with.