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FG cracks down on illegal crypto traders

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FG cracks down on illegal crypto traders

Story by Uchechi OGBUEHI-DANIEL, Lagos

The Securities and Exchange Commission (SEC), Monday, vowed to act decisively to uphold the integrity of the capital market and protect the interests of all investors.

It said this is aimed at ridding the virtual assets space of illegal trading activities.

Our correspondent reports that the activities of speculators in the digital marketing space had a few weeks ago exerted serious pressure on the naira, at a time the federal government and the Central Bank of Nigeria (CBN) were trying to address its downward slide occasioned by inflation that affected prices of goods and services in the country.

Acting Director General of the SEC, Dr Emomotimi Agama, who spoke during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), the umbrella body of all major blockchain and cryptocurrency associations in Nigeria, said tough decisions must be taken to stabilise the economy.

The meeting was coming amidst the tightening of the noose on crypto exchanges in the country.

Our correspondent reports that the federal government had earlier in January blocked crypto users in Nigeria from accessing the platforms of key operators like Binance, and OctaFX, among others, even as SEC earlier proposed an increase in registration fees from N30m to N150m.

The crypto market in Nigeria is estimated at over $57bn, even as the clampdown by the CBN recently was linked to the negative impact it was having on the foreign exchange market, prompting Binance to shut down its services in Nigeria.

The CBN further warned fintech companies in Nigeria against onboarding new customers as part of measures to prevent any illegal trading activities on their platforms.

As a follow-up to the ongoing noose-tightening measures, SEC Nigeria yesterday reiterated that it will not hesitate to use all the powers within its mandate to handle issues that are negative and pose a threat to the national interest.

Agama stated that the Commission had come as a partner to seek collaboration in making sure that the capital market community is one that is respected globally for decency and fair play.

The SEC boss said recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira underscored the need for collective action and dialogue within the financial market ecosystem.

Agama stated that one of the things that needed to be done is delisting the naira from the Peer-to-Peer (P2P) space in order to avoid the level of manipulation that is currently happening, warning participants in the crypto space to be patriotic enough to name and shame those that are involved in disrupting the markets negatively.

“I want to seek your cooperation in dealing with this as we roll out in the coming days the regulations that would take control of these areas. We want to assure that this management will ensure that people or institutions that require registration with the SEC are quickly licensed. We assure you that we will give guidance when necessary and do well to streamline the processes to make it less difficult.

The SEC DG said the federal government expects players in the crypto space to play by the rules as enshrined in the Investments and Securities Act 2007.

“Some may say there are no rules to play by, but do not forget that we have the Investments and Securities Act 2007, which some actions by participants today may be violating, hence the law is the law irrespective of the technology used.

“However, for the specific digital asset regulatory regime that many have been calling for, we want to assure you that we are working tirelessly to establish an accommodating regulatory guideline for digital assets. The SEC as your regulator is desirous to work with you by providing a level of assurance that is needed by all that are operating within the rules of the market,” he said.

The DG stated that the proposed regulatory guidelines being fine-tuned with suggestions by various stakeholders will encompass various activities within the cryptocurrency ecosystem ranging from wallet providers, digital asset custodians and fund managers, Cryptocurrency Crowdfunding, Initial Coin Offerings (ICOs), Security Token Offerings (STOs), Initial Exchange Offerings (IEOs), Cryptocurrency Exchange platform providers, Virtual Asset brokerage services, etc., ensuring that every Nigerian playing within the industry with the potential to contribute to economic progress is included, supported and properly regulated.

“I am poised for an innovative digital asset regulatory regime that will sustain Nigeria as Africa’s digital asset powerhouse with diverse solutions like Real World Asset Tokenisation (RWA) that will drive wealth and catalyse our capital market. We must explore innovative solutions to this problem and strike the right balance between encouraging innovation and safeguarding our national economic interests. This we will do in a friendly and firm manner, to enable us to achieve the desired result.

“We have a great market ahead of us and we have the talents and the people to make the market great. Mr. President is concerned about the teeming youths involved in this space and would encourage them to do the right thing and develop an ecosystem that we all will be proud of. It becomes necessary that we do what is right. Manipulations and all forms of activities that undermine our national interest would not be acceptable. It is therefore very important that we know that the SEC by virtue of Section 13 of the ISA speaks to the regulation of all capital market activities.”

Agama commended the leadership of the Blockchain Industry Coordinating Committee of Nigeria (Biccon) the umbrella body of all major blockchain and cryptocurrency Associations in Nigeria, and assured them of the commission’s readiness to work closely with all stakeholders in the cryptocurrency ecosystem to create a better country for all of us.

“With our deep understanding of this industry and the cryptocurrency sub-sector, we recognise the importance of collaboration and cooperation in addressing the challenges we face; hence your insights and suggestions are invaluable as we seek to navigate these complexities together. We need your support as much as you need ours.

“On that note, I want to emphasise that we are working on different fronts to sustain decent practices within our market. However, we are here to meet ourselves to know those playing within the sector decently and are open to hearing your suggestions on how we can effectively manage all obscure cryptocurrency trading activities within our jurisdiction p2p inclusive irrespective of the challenge we all know that p2p trading poses.”

Chairman of the Fintech Association of Nigeria, Dr Babatunde Oghenobruche Obrimah, commended the SEC for its bold steps and the relationship with the ecosystem and pledged their commitment to the success of the initiative.

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