Nigeria’s SEC to Initiate Regulatory Actions Against Unlicensed Cryptocurrency Companies

Nigeria’s Securities and Exchange Commission (SEC) is set to implement enforcement actions against cryptocurrency companies operating without proper regulation.

This initiative is intended to address firms that do not adhere to the nation’s regulatory standards, as stated by Emomotimi Agama, the SEC’s Director General, in a recent interview with local media.

“We will initiate enforcement actions against anyone conducting business in this market without the intent to be regulated,” Agama remarked.

Nigeria SEC Begins Issuing Licenses to Exchanges

While Nigeria has adopted a cautious stance towards cryptocurrencies, the SEC has recently started granting licenses to compliant crypto companies.

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

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

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

The ARIP was created by the SEC to incorporate firms that had already commenced operations prior to the issuance of the Rules on Virtual Asset Service Providers in May 2022.

The RI Programme, as per the SEC, is aimed at assessing the business models of digital asset companies and testing innovative products, services, and technologies in a controlled market setting under SEC oversight.

However, the country has previously restricted some exchanges, even as reports indicate that platforms like Coinbase remain accessible.

In March, the SEC also released guidance intended to prevent criminals from registering as cryptocurrency operators.

The regulator’s recent actions occur amidst an ongoing trial involving the Binance exchange and two of its executives.

One executive, who has been detained for over six months, is reportedly seeking bail due to serious health issues.

NEW: Former US federal agent Tigran Gambaryan seen on crutches while being tortured and held hostage in Nigeria as the Biden Admin fails to help.
The Binance executive has been held captive for 6 months after he was lured to Nigeria for a business meeting.
Gambaryan’s family is… pic.twitter.com/eDtPeSduo3

— Collin Rugg (@CollinRugg) September 3, 2024

Nonetheless, Agama asserted that the SEC’s enforcement actions would not hinder innovation but would promote a secure and regulated environment for the market to flourish.

“All this we aim to achieve without obstructing innovation because part of our primary duty as the SEC is market development.”

Binance Legal Drama Could Damage Nigeria’s Reputation

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

BICCoN, which represents the Nigerian blockchain sector, called for a balanced approach to resolving these matters, highlighting the potential effects on the country’s blockchain ecosystem and international standing.

The ongoing legal disputes and the detention of Binance executives have fostered an environment of uncertainty and risk, which could deter prospective investors and partners, according to BICCoN President Lucky Uwakwe.

Recently, US lawmakers French Hill and Chrissy Houlahan visited Kuje Prison in Nigeria, where detained Binance executive Tigran Gambaryan is being held.

Hill characterized Gambaryan’s wrongful detention in what he described as a “horrible prison,” drawing attention to the health issues Gambaryan is facing while in custody.

On June 14, a court ruling exonerated Gambaryan and Anjarwalla of tax evasion charges.

However, despite being cleared of tax evasion charges, the Binance executive still faces a separate money laundering case.

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