SEC not considering cryptocurrencies’ in the push for digital assets despite Nigerians’ interest

Adeniyi Odukoya
SEC to avoid cryptocurrency in digital asset push

The securities and exchange commission (SEC) has disclosed that it will not consider promoting cryptocurrencies as it pushes for adopting digital assets across the country.

The cryptocurrency ecosystem recorded a greater increase in investments by Nigerians this year despite the market’s overwhelming meltdown. Since 2009, the rate at which Nigerians have jumped into the cryptocurrency market has increased significantly.

SEC not considering cryptocurrencies' in digital assets push despite Nigerians' interest

Technext had earlier reported the increase in cryptocurrency holders in the country during the year and how Nigeria ranks as one of the top countries with residents most highly and keenly interested in the happenings of the cryptocurrency ecosystem.

Read more: Cryptocurrency holders in Nigeria increase despite the crypto winter of 2022

Despite the huge interest from Nigerians, the Securities and Exchange Commission (SEC) of Nigeria has no intention to involve crypto in its digital asset pursuit. That is, at least until regulators reach a consensus on the standards that protect investors from the market’s jaw-dropping volatility.

The SEC’s general director, Lamido Yuguda, disclosed this to reporters in Lagos during the weekend. He said the SEC will promote investment in “sensible digital assets,” with investment protection and explore blockchain technology to advance virtual and traditional investment products.

Read Also: What Russian lawmakers’ decision to launch crypto exchange could mean for the market

Nigeria SEC will not be promoting cryptocurrencies in their push for digital assets

Nigeria SEC’s long-time involvement with cryptocurrencies

In February 2021, the Central Bank of Nigeria banned cryptocurrency transactions with the country. Banks and other financial institutions are restricted from engaging in cryptocurrencies in Nigeria. CBN did not term cryptocurrency as illegal; rather it termed it as unregulated— no particular regulatory framework led to the infringement on trading cryptocurrency within Nigeria. 

According to CBN’s official statement on January 2017 concerning digital currency or cryptocurrency transactions in Nigeria, they are majorly anonymous and undetectable— which makes them susceptible to fraud and other financial crimes. Nigeria Securities and Exchange Commission- the major regulatory body for the Nigerian capital market— released a statement concerning virtual assets, and their control with core attention to the cryptocurrency regulatory framework in Nigeria. 

The Commission mentioned that it would control innovation in the cryptocurrency sector in three ways: safety, market deepening, and providing solutions to issues that will lead to its regulations, strategy and interactions with innovators seeking legitimacy and relevance in this growing industry. As a reaction, the commission released regulatory guidelines for virtual currencies and crypto-based firms or startups, hinting that they will regulate crypto-token or crypto-coin investments where the nature of the investments fits as securities transactions.

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The Commission’s statement emphasized that the regulations’ goal is not to impede technology or innovation but to establish norms that encourage ethical behaviour. In a previous statement, the SEC warned stakeholders and the investing public against dealing with fraudulent, unregistered investment schemes and capital market operators, particularly those making bogus investments and unjustifiable return claims, and advised the public to tread carefully to avoid being swindled.

Established in 1979, Nigeria’s Securities and Exchange Commission is the major regulatory institution of the Nigerian capital market. The Federal Ministry of Finance supervises it. It seeks to regulate the market and protect stakeholders from losses. 

Why Nigeria’s SEC is avoiding cryptocurrencies in its digital assets pursuit

The SEC is avoiding cryptocurrency because the exchanges do not have access to the banking platform needed to pursue their trades in Nigeria, Director-General Lamido Yuguda informed Bloomberg News report.

The commission will promote investment in “sensible digital assets,” with investment protection while also looking into blockchain technology to drive virtual and traditional investment products, Yuguda said.

Read also: 3 self-custody wallets to safeguard your crypto assets following the FTX crash

“The commission is in the business of protecting investors, not in the business of speculation,” he said, alluding to volatility concern in cryptocurrencies. As the digital assets market evolves, the SEC could promote crypto, said Yuguda, adding that for the moment, “any asset that is traded in the Nigerian capital market requires the joint approach of different regulators.”

  


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