The Nigeria Securities and Exchange Commission, SEC, has emphasized on crypto regulatory approval for crypto exchanges that the recent approval-in-principle granted to two crypto exchanges aligns with the Commission’s objective of increasing youth participation in Nigeria’s capital market.
The Commission’s statement on Wednesday 4th of September 2024 detailed that SEC Director General, Dr. Emomotimi Agama, stated this during a meeting in Abuja.
The commission highlighted the importance of engaging Nigeria’s youthful population, a key objective of President Bola Ahmed Tinubu’s administration.
creating a structure to enhance youth and broader public participation in the market is essential.
First Sets Of Crypto Exchanges Granted Licence
in late August and earlier September 2024, the Commission granted approvals to Busha Digital Limited and Quidax Technologies Limited.
According to Dr. Agama, “It is crucial that we act appropriately. As a nation, we must not be left out of the global phenomenon that is rapidly evolving.
The SEC, as a forward-looking institution, is committed to ensuring that we are among the countries that do what is necessary.
“We are building talents to address the challenges that these asset classes might bring. Many young Nigerians are deeply involved in this sector, and we cannot shut the door on them.
“Instead, the President’s intention is to include them in the capital market, which is why we are implementing regulations to protect investors and ensure market development. This is the SEC’s responsibility.”
Dr. Agama emphasized that the SEC is proceeding cautiously to ensure these institutions do not pose risks to the national economy or to individual investors.
He explained that the SEC’s digital asset exchanges program is based on its Virtual Assets Service Providers Regulation.
He pointed out that given the nature of crypto exchanges and the industry as a whole, it was crucial to develop regulations that allow the Commission to fully understand these exchanges and virtual financial asset service providers.
The SEC’s initiative stems from its initial Regulatory Incubation Programme, aimed at studying new fintech platforms and products to assess the associated risks, he stated.
SEC’s Monitoring Team
Dr. Agama stressed that the SEC’s primary responsibility remains investor protection and market development.
To avoid stifling innovation, we established a Sound Box to understand these companies’ operations, their impact on customers, the Nigerian public, and the economy as a whole.
“Following the introduction of the VAPS regulation, we initiated the Accelerated Regulatory Incubation Programme. The first stage is the Regulatory Incubation Programme, followed by the Accelerated Incubation Programme, which caters to institutions seeking SEC regulation.
“As you know, non-regulation of these entities poses a significant risk to our economy. Therefore, it is crucial for building trust and confidence,” he explained.
Dr. Agama clarified that while the Commission has not fully licensed any exchange, it has provided approval in principle.
“This controlled experiment allows companies that meet regulatory requirements to enter a regulatory incubation phase, during which they are closely monitored.
“This process allows us to understand their operations, assess the risks they pose to the economy, investors, and themselves as operators.
“The goal is to study these entities and provide the necessary guidance and regulations to ensure they operate seamlessly within the system, without defrauding Nigerians or causing disruptions to the economy. We are ensuring that they adhere to regulations similar to those in other jurisdictions,” Dr. Agama added.
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