The Securities and Exchange Commission (SEC) of Nigeria has postponed the issuance of new provisional licenses to cryptocurrency startups participating in its Accelerated Regulatory Incubation Programme (ARIP), due to the need for further due diligence, according to its Director General, Emomotimi Agama.
During a virtual stakeholder engagement organized by the FinTech Association of Nigeria (FintechNGR), Agama acknowledged the delays in the process and offered an apology to the applicants.
“Work has been going on underground. From the first batch of provisional licences [issued in August 2024], we have observed important issues we need to take care of,” Agama said.
“Additional level of due diligence – what I call Level 3 due diligence – needs to happen before we can come out with the next set of provisional licences.”
Agama pointed out that there are still shortcomings and challenges in the due diligence process for startups. He emphasized that SEC Nigeria is not the sole regulator of Nigeria’s cryptocurrency sector.
The commission is collaborating with other key agencies, including:
- The Economic and Financial Crimes Commission (EFCC)
- The Nigerian Financial Intelligence Unit (NFIU), and
- The Office of the National Security Adviser (ONSA)
all of which have their own independent procedures beyond the SEC’s control, he revealed.
REGULATION | Nigerian Crypto Company Fined and Forfeits ~85,000 for Exchanging $USDT/Naira Without License
The judge ruled that if the defendants do not pay within 14 days, the EFCC is to bring the director back for imprisonment.https://t.co/7Sb0N2HB93 $NGN #Nigeria pic.twitter.com/X9Z1WbUVxP
— BitKE (@BitcoinKE) October 25, 2024
Since granting provisional licenses to crypto exchanges, Quidax and Busha, in August 2024, the SEC has not approved any additional applicants. Numerous startups that applied under the ARIP framework in June 2024 remain in ongoing discussions with the regulator to clarify compliance expectations and enhance consumer protection measures.
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
Meanwhile, the SEC introduced a new law to control the issue of crypto influencers who use their platforms to promote crypto projects.
Failure to comply could result in a fine of N10 million Naira (~$6,500) and a prison sentence of up to 3 years.https://t.co/KOQb0JUu1Q pic.twitter.com/bjRRBivvRl
— BitKE (@BitcoinKE) December 23, 2024
The new law, expected to take effect in June 2025, mandates that every crypto platform or Virtual Assets Service Provider (VASP) must be registered and hold a license from SEC Nigeria before promoting on social media, TV, or print media.
Agama stated that the SEC aims to embrace collaboration more deeply as it works toward establishing a robust regulatory framework for the crypto industry.
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