Two crypto companies are the latest victims of Nigeria’s new crypto regulation regime.
According to local outlets:
- Paparaxy Global Ventures Limited and
- Lemskin Technologies Limited
have refunded N160,000,000 ($97,468) to the federal government after being indicted for providing USDT to Naira exchanges without valid licenses.
Both companies entered plea bargains with the Economic and Financial Crimes Commission (EFCC) where they agreed to forfeit monies to the commission.
- Paparaxy has restituted N140 million to the federal government, while
- Lemskin refunded N20 million
The defendants admitted that they engaged in negotiating United States Dollar Tether (USDT) against the Naira with the public without being authorized dealers in the Nigeria Autonomous Foreign Exchange Market, and conducted specialized financial institution business without a valid license.
The defendants admitted to failing to report a single transfer to the Special Control Unit on Money Laundering (SCUML), in violation of Section 10(3) of the Money Laundering (Prohibition) Act, 2011.
The defendants returned the amounts, acknowledging that it was part of the benefits they gained from committing the offenses. As part of the plea bargain, the directors of the two companies are required to file an affidavit of good behavior with the court.
The Nigeria Securities Exchange Commission (SEC Nigeria) first granted ‘Approval-in-Principle’ licenses to two digital asset exchanges:
- Quidax and
- Busha Digital
on on August 29 2024 allowing them to begin operations under the Accelerated Regulatory Incubation Program (ARIP).
🇳🇬REGULATION | Nigerian Crypto Exchange, Quidax, Receives Provisional Operating License from SEC Nigeria
With the license granted by the Nigerian SEC, Quidax is now able to collaborate with banks and other financial institutions, subject to the Central Bank of Nigeria’s… pic.twitter.com/4gPpLyJi4z
— BitKE (@BitcoinKE) August 29, 2024
“We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated.
For those that do not want to play by the books, we will not allow them to operate within our space,” Dr. Emomotimi Agama Director-General of SEC Nigeria said at the time.
Besides the 2 exchanges, 5 more operators were approved under the program while more applications continue to be considered on a case-by-case basis as they meet all SEC requirements.
🇳🇬REGULATION | SEC Nigeria Approves 8 Digital Assets Exchanges and Offering Platforms Onto its Regulatory Incubation Program
The ‘Approval-in-Principle’ is a preliminary step toward full registration by the SEC, ensuring that appropriate protection and transparency measures are… pic.twitter.com/Fc1Y7J0y08
— BitKE (@BitcoinKE) August 29, 2024
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