In a bid to address the growing concerns surrounding cryptocurrency trading in Nigeria, the Acting Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has advocated for stringent measures, including blocking P2P trading, aimed at safeguarding the integrity of the Nigerian capital market.
During a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), Agama emphasized the need to clean up the virtual assets space from illegal trading activities, particularly in light of recent developments impacting the Naira’s exchange rate.
Agama’s advocacy for a new cryptocurrency measure signals a departure from the previous SEC’s approach, indicating a potentially more stringent regulatory stance under his administration. The proposed measure aims to remove the Naira as a currency pair from cryptocurrency peer-to-peer platforms, to curb market manipulation and protect national economic interests.
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The surge in peer-to-peer (P2P) crypto trading has reportedly had adverse effects on the Naira’s exchange rate, prompting the SEC to consider delisting the Naira from P2P platforms. Agama stressed the importance of a cooperative approach in addressing these challenges, calling on participants in the crypto space to be patriotic and cooperate with regulatory efforts to maintain market integrity.
“Agama stated that one of the things that needs to be done is delisting the naira from P2P space in order to avoid the level of manipulation that is currently happening enjoining participants in the crypto space to be patriotic enough to name and shame those that are involved in disrupting the markets negatively,” a statement from the SEC said.
In addition to delisting the Naira from P2P platforms, the SEC is in the process of developing inclusive regulatory guidelines for the digital asset sector. These guidelines, crafted with input from various stakeholders, will cover a wide range of crypto-related activities, including wallet services, digital asset custody, and fund management. The aim is to create a well-regulated digital asset marketplace that contributes to Nigeria’s economic progress.
Agama urged the cryptocurrency community to support regulatory efforts by identifying and addressing harmful practices within the market. He emphasized the importance of collaboration and openness in achieving a transparent and thriving digital asset environment, reflecting the government’s commitment to fostering a conducive atmosphere for the burgeoning fintech sector.
“I want to seek your co-operation in dealing with this as we roll out in the coming days the regulations that would take control of these areas. We want to assure you that this management will ensure that people or institutions that require registration with the SEC are quickly licensed. We assure you that we will give guidance when necessary and do well to streamline the processes to make it less difficult.
“We ask that those involved in sharp practices that undermine national interest should cease and desist. It is in our interest as a people to protect what belongs to us. We encourage you to reach out to us by naming and shaming the bad actors. Together, I am confident that we can weed out bad actors and harness the immense potential of this progressive technology for the benefit of all Nigerians in tandem with this government’s renewed hope agenda,” the SEC head was quoted as saying.
The SEC’s advocacy for stringent cryptocurrency regulation comes amid heightened concerns and regulatory actions targeting cryptocurrency trading in Nigeria. Recent developments, including the classification of cryptocurrency trading as a national security issue by Nigeria’s National Security Adviser (NSA) Nuhu Ribadu and directives from the Central Bank of Nigeria (CBN) to block accounts engaged in cryptocurrency transactions, denote the government’s desire to develop robust regulatory measures to address emerging risks in the digital asset space.
The Nigerian crypto space was agog last month, following the government’s decision to clamp down on Binance – the world’s largest exchange. Two of Binance’s executives are still being held in Nigeria by the authorities. The authorities said P2P activities are significantly enabling the naira’s volatility, forcing Binance to disable its P2P feature in February.
Furthermore, the CBN instructed four fintech startups—Opay, Moniepoint, Paga, and Palmpay—operating in the country to block the accounts of customers involved in cryptocurrency transactions and to report such activities to law enforcement agencies.
Before this, the Economic and Financial Crimes Commission (EFCC) had obtained a court order to freeze at least 1,146 bank accounts linked to various individuals and businesses allegedly involved in illicit foreign exchange dealings.
This new move by the SEC means its earlier measures that included a proposed regulatory framework has been jettisoned. In 2022, the SEC issued new guidelines on the issuance of digital assets in Nigeria, following calls for regulation of the digital asset industry. The regulator introduced a comprehensive set of regulations covering various aspects of the digital market.
However, despite the consensus from both stakeholders and watchdogs that the digital asset industry requires urgent regulation, the proposed guidelines failed to be adopted.