The Securities and Exchange Commission of Nigeria intends to crack down on digital currency companies operating in the country without going through proper regulatory oversight. In a bid to bring into check the bourgeoning crypto market, the director general of the West African nation’s apex regulator, Emomotimi Agama, insisted that such a commission was targeting those companies that had shunned the country’s prescriptive regulations.
“We will start taking enforcement actions against anyone operating in this market who does not show the intent to be regulated,” Agama told local media in an interview.
Licensed Crypto Exchanges Increase
Despite the reigning caution taken by Nigeria in her approach toward cryptocurrencies, in recent times, the SEC has indeed started granting licenses to compliant exchanges. Last month, the license was issued to Quidax and Busha – exchanges of cryptocurrencies – a certain indicative improvement in the degree of acceptance of digital assets within a regulated framework.
In addition to this, the SEC has also admitted another five companies into the Regulatory Incubation Program of the commission. This will avail the institutions the opportunity to test their business models and technologies in a controlled environment. The five other admitted companies are Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd.
Balancing Regulation and Innovation
The Nigerian SEC has created a regulatory incubation program that will have innovative digital asset companies operate their businesses, but this time, under the watch of the SEC with compliance. In creating this framework, it has become encouraging for innovation to occur in a controlled market environment whereby it will ensure that the digital products, services, and technologies applied by such entities will always meet the standards set by the regulators.
However, some of these exchanges, such as Binance, have encountered legal challenges as well. This March, the SEC created regulations that would help prevent criminals from registering as crypto operators for the betterment of the market’s security.
Binance Legal Case: An Emerging Concern
The case between Binance and the Nigerian government began to raise more concern in Nigeria’s blockchain world. Essentially, there is unease on the part of Blockchain Industry Coordinating Committee of Nigeria, BICCoN, with regard to the damage in the country’s blockchain ecosystem and thereby the country’s reputation of hosting such an ecosystem. These court battles have brought uncertainty to the table that might deter investors.
Ongoing allegations of money laundering and tax evasion against the exchange of Binance also continue to unwind, with one executive still in detention after more than six months.
Conclusion
While the Nigerian SEC is considering trying to regulate crypto space, it believes compliance and security are what matter. This, it believes, would not hamper innovation but would inspire a flourishing and secure market environment for all.
