The Securities and Exchange Commission (SEC) of Nigeria has announced plans to take strict enforcement actions against individuals and businesses, including cryptocurrency exchanges, that operate outside its regulatory framework. This decision, made by SEC Director-General Dr. Emomotimi Agama, aims to enhance investor protection within the rapidly growing cryptocurrency market.
In a statement released recently, Dr. Agama emphasized the SEC’s commitment to safeguarding investors, especially in the digital asset space. This announcement comes shortly after the SEC approved two cryptocurrency exchanges, Quidax and Busha, making them the first legally recognized platforms in the country under SEC regulations. Although several exchanges operate in Nigeria, these two are currently the only ones compliant with the SEC’s mandates.
Dr. Agama highlighted the importance of creating a clear regulatory framework that can protect investors while also fostering innovation. “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,” he stated.
The SEC’s recent approval of Quidax and Busha was motivated by a surge of interest from young Nigerians in digital assets. Dr Agama noted that the market is projected to reach $52.5 million by 2028, indicating a significant opportunity for growth in the cryptocurrency sector. However, he stressed that any expansion must be conducted within a framework that prioritizes investor safety.
As part of its regulatory strategy, the SEC will enforce anti-money laundering (AML) measures and combat financing of terrorism (CFT) protocols. These initiatives are essential components of the SEC’s approach to overseeing activities in the cryptocurrency market. The commission has received numerous applications from other crypto exchanges seeking registration but clarified that only those meeting stringent regulatory standards will be approved.
In addition to regulating crypto exchanges, the SEC is taking steps to protect citizens from misinformation and fraudulent activities online. Dr Agama noted that monitoring these exchanges is crucial to preventing any potential negative impact on Nigeria’s economy.
While the SEC aims to encourage innovation, Dr. Agama underscored the necessity for a guided regulatory framework that ensures participants in the cryptocurrency space are well-informed and compliant with the law. “All these we seek to do without hindering innovation because part of our primary responsibility as the SEC is market development,” he explained.
The SEC has also launched additional programs, such as the Accelerated Regulatory Incubation Program (ARIP), to support emerging digital asset firms. Besides Quidax and Busha, four other companies—Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExchange.NG Ltd—has been admitted to test their models under the Regulatory Incubation (RI) Program.
These developments indicate a huge shift in Nigeria’s approach to cryptocurrency regulation, aiming to balance investor protection with the promotion of innovation in the digital asset sector.
