Nigeria’s Securities and Exchange Commission (SEC Nigeria) plans to introduce regulations for cryptocurrencies once the government makes it legal for banks to participate in virtual currencies.
On February 5, 2021, the Central Bank of Nigeria (CBN) instructed all financial institutions to stop the facilitation of all transactions involving cryptocurrencies. Furthermore, the apex bank notified all regulated bodies to identify individuals or organizations engaging in cryptocurrency transactions within their system and shut down their accounts with immediate effect.
Banks failing to adhere to the instructions were warned that they would face sanctions. As such, the nature of the instructions led many to believe that the country was banning cryptocurrencies even though the Central Bank would later clarify that only banks were denied permission to engage in crypto.
However, at this point, the country’s SEC says it is looking to protect investors.
According to Lamido Yuguda, Director-General, SEC Nigeria:
“We are looking at this market closely to see how we can bring out regulations that will help investors protect their investment in blockchain.”
– Director-General, SEC Nigeria
In that respect, the SEC is looking to set up a cryptocurrency department.
The regulator has come under pressure in recent times with some experts and stakeholders asking it to introduce guidelines or a framework for the trading of crypto in the country claiming the responsibility falls with the SEC rather than the Central Bank of Nigeria as other may presume.
In April 2021, the Central Bank of Nigeria indicated that it was working alongside the SEC ‘to understand cryptocurrencies.’
The situation around regulation is still not clear given that in 2020, SEC Nigeria said it would be regulating cryptocurrencies with the understanding that they are securities and not currencies.
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