Nigeria’s SEC to Implement Rules for Unregistered Crypto Ventures

Nigeria’s Securities and Exchange Commission (SEC) is preparing to initiate enforcement actions against businesses and individuals conducting unregulated cryptocurrency activities.

Emomotimi Agama, the director-general of Nigeria’s SEC, stated in a Sept. 9 report by local outlet Nairametrics that the country is stepping up efforts to crack down on entities offering crypto services without regulatory oversight.

SEC Targets Unregulated Crypto Activities

Agama highlighted that the SEC’s actions are aimed at safeguarding investors, including those active in the crypto sector. He emphasized that the commission will begin enforcing actions against anyone attempting to operate in the market without following regulations and will not allow those unwilling to adhere to the rules to continue operating.

The SEC’s statement follows roughly two weeks after the agency granted provisional operating licenses to two local crypto exchanges, Busha Digital and Quidax Technologies, on Aug. 29. Agama noted that these recent approvals were driven by the increasing interest in digital assets among young Nigerians. He stressed the importance of a well-defined regulatory framework that encourages innovation while protecting investors.

As part of its oversight, the SEC plans to enforce Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) protocols within the crypto space.

Crypto Regulations and Exchange Scrutiny

Observers have pointed out that Nigeria’s approach to regulating cryptocurrency has been inconsistent, despite its status as a key global crypto market.

In early 2021, the Central Bank of Nigeria (CBN) imposed a ban preventing financial institutions from facilitating crypto transactions. A year later, the SEC introduced a regulatory framework for crypto exchanges. The CBN lifted the blanket ban in late 2023 but subsequently introduced new regulations in May 2024 aimed at curbing peer-to-peer crypto transactions using the national currency, the naira.

Global exchanges have also faced scrutiny in Nigeria. Binance, which announced its exit from the country in March 2024, remains entangled in legal issues. Despite its departure, law enforcement continues to hold Binance’s head of financial crime compliance, Tigran Gambaryan, who was arrested in February. Gambaryan has been detained for over six months, with a court decision on his bail anticipated in October.