- Nigeria boasts one of the largest cryptocurrency markets globally, it lacks a dedicated legal framework for the sector.
- Leadership changes under President Bola Ahmed Tinubu have seen the SEC take a more prominent role in regulating the industry.
- In August 2024, Busha Digital and Quidax Technologies became the first digital asset companies authorized to operate in Nigeria.
Emotimi Agama, the Director-General at the Securities and Exchange Commission, Nigeria, warned that some digital asset service providers (VASP) license applicants do not meet the needs of the regulator and their applications will not be accepted.
At a recent meeting with applicants, Agama emphasized that the Nigerian Securities and Exchange Commission (SEC) remains committed to clarifying complex issues to streamline the registration process.
His remarks come months after the SEC granted its first licenses under the Accelerated Regulatory Incubation Program (ARIP). In August 2024, Busha Digital and Quidax Technologies became the first digital asset companies authorized to operate in Nigeria under this program.
The registration for VASPs
Agama highlighted that the registration process for Virtual Asset Service Providers (VASPs) goes beyond onboarding and includes aspects like monitoring, education, and surveillance. He also assured stakeholders that the SEC is open to constructive feedback and willing to amend its regulations when valid reasons are presented.
“In the coming year, we plan to accelerate our progress in delivering outcomes and making announcements, drawing from the lessons learned in this process. A new law has been passed and is currently awaiting Presidential assent,” Agama stated.
One of the largest crypto markets
Although Nigeria boasts one of the largest cryptocurrency markets globally, it lacks a dedicated legal framework for the sector. Before Agama’s tenure, the Central Bank of Nigeria (CBN), under the leadership of Godwin Emefiele, largely shaped the country’s crypto policy.
However, leadership changes under President Bola Ahmed Tinubu have seen the SEC take a more prominent role in regulating the industry. Agama affirmed that the Commission’s goal is to ensure Nigeria not only remains a key player in the crypto market but also sets a benchmark for effective regulation.
Fraud prevailing in the market
One of the biggest concerns of the SEC is to avoid fraudulent activities. Recently, Nigeria’s Economic and Financial Crimes Commission (EFCC) announced the arrest of 792 individuals during a raid on a building suspected of being a hub for fraudulent activities. The suspects allegedly used romance scams to deceive victims into investing in fake cryptocurrency schemes.
The operation took place on December 10 at the seven-story Big Leaf Building located in Lagos, the commercial hub of Nigeria. According to EFCC spokesperson Wilson Uwujaren, those arrested included 148 Chinese nationals and 40 individuals from the Philippines.
Uwujaren added that the luxury facility reportedly operated as a call center targeting victims primarily in the Americas and Europe.
