By Adedapo Adesanya
Nigeria’s Securities and Exchange Commission (SEC) has clarified the approval it granted two crypto exchanges in the country.
In a statement, the Director-General of the agency, Mr Emomotimi Agama, emphasised that the firms were never given full approval, but only in principle to give Nigerian youths the opportunity for capital market participation.
Last week, the regulator granted Busha Digital Limited and Quidax Technologies Limited approval-in-principle to commence operation under its Accelerated Regulatory Incubation Program (ARIP).
Mr Agama said the action was in line with the desire of President Bola Tinubu to engage with the youths, creating a structure that will enhance their participation, as well as other Nigerians in the market.
“It is important that we act accordingly. We can not be left out of the global phenomenon that is beginning to take shape.
“SEC, as a future-looking institution, is poised to make sure that we are in the league of countries that do what is needed.
“As much as possible, we are building talents to be able to deal with the challenges that these asset classes could bring to our shores.
“A lot of young Nigerians are fully involved in cryptocurrencies and we cannot shut the door against them, rather the intention of the president is to have them included in the capital market.
“That is why SEC is ensuring that there is regulation and no one is hurt at the end of the day, which is part of our responsibility to protect investors and develop the market,” he said.
According to Mr Agama, the commission is doing all of these cautiously to ensure that these institutions do not pose risks to the national economy and to citizens who invested in them.
He disclosed that SEC’s programme on digital assets exchanges emerged from its Virtual Assets Service Providers Regulation given the nature of crypto exchanges and the entire industry.
The director-general noted that it was important to outline a regulation that allowed the commission to fully understand crypto exchanges and virtual financial assets’ services providers.
He said that the idea was borne out of the initial Regulatory Incubation Programme of SEC in its desire to understudy fintech platforms and products that are new to the market.
Mr Agama said that this was to enable the dimension of the risks that were associated with these institutions and their products.
He stressed that the commission had not yet outrightly licenced any exchange, but had provided an approval-in-principle.
He said that the approval granted was a controlled experiment wherein companies that have applied, meet the fit and proper person test and other regulatory guidelines are invited into a regulatory incubation.
“It allows us to know exactly what they are doing, the risks that they pose to our economy, investors, and themselves as operators.
“The idea is, you need to do that to be able to study them and provide all the guidance and regulations required by them to operate in the system seamlessly while also not defrauding Nigerians.
“We are making sure that they operate within regulations similar to what is obtainable in other jurisdictions,” he said.
Business Post reports that despite the approval granted by the SEC, trading cryptocurrencies is still a risky business since the Central Bank of Nigeria (CBN) bars financial institutions from processing crypto-related transactions with many accounts locked due to this activity.
