Nigeria's Securities and Exchange Commission (SEC) is gearing up to intensify enforcement actions against crypto exchanges and other businesses outside its regulatory purview.

This move, reported by local media, aims to safeguard investors and uphold market stability in Nigeria's burgeoning digital asset sector. The sector is expected to skyrocket, potentially reaching $52.5 million by 2028.

Regulatory Commitment

In a statement released on September 8, SEC Director-General Emomotimi Agama emphasized the commission's unwavering commitment to ensuring that all market participants adhere to established rules.

Agama stated, "We will soon commence enforcement actions against those who operate in this market without adhering to regulatory guidelines. Anyone unwilling to follow the proper channels will not be allowed to continue operations."

This declaration underscores the SEC's focus on promoting full transparency, anti-money laundering (AML) protocols, and measures to combat the financing of terrorism (CFT) within the digital asset space.

Balancing Innovation and Safety

Agama reassured stakeholders that the SEC's role is not to stifle innovation. Instead, the commission aims to create a structured environment where new technologies can responsibly flourish.

The regulatory push seeks to strike a balance between fostering innovation and ensuring the safety of investors. This approach is crucial as Nigeria's digital asset market expands rapidly.

Recent Developments

The SEC's recent actions follow its granting its first-ever approval-in-principle to two local crypto exchanges, Quidax and Busha. These exchanges are currently the only ones operating legally under the commission's regulations.

Agama mentioned that several other applications are under review, but exchanges must meet stringent standards to receive approval. This rigorous vetting process ensures that only compliant and trustworthy platforms operate within Nigeria's digital asset market.

Regulatory Incubation Program

In addition to approving Quidax and Busha, the SEC has admitted four firms into its Regulatory Incubation (RI) Program. This program allows these firms to develop and test their platforms under regulatory supervision.

The RI Program is a crucial step in ensuring that new market entrants can operate within a structured and compliant framework, ultimately enhancing the overall integrity and stability of Nigeria's digital asset sector.