Government Unveils Stringent Regulations For Multi-Billion Dollar Crypto Ventures

Government Unveils Stringent Regulations For Multi-Billion Dollar Crypto Ventures

The Federal Government is contemplating a potential suspension of the $56.7 billion peer-to-peer cryptocurrency market following an imminent meeting between the Securities and Exchange Commission (SEC) and digital asset operators scheduled for Monday………..CONTINUE READING

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According to the 2023 Geography of Cryptocurrency Report by Chainalysis, Nigeria witnessed a nine percent increase in crypto transactions, reaching $56.7 billion between July 2022 and June 2023.

This move by the SEC indicates a broader governmental effort to enhance regulatory oversight within the cryptocurrency sphere, driven by concerns over illicit activities and the impact on the naira exchange rate.

Recently, the Central Bank of Nigeria halted major fintech firms from onboarding new customers, citing an ongoing audit of their Know-Your-Customer processes. Subsequently, fintech firms like Opay and PalmPay cautioned customers against engaging in cryptocurrency trading on their platforms, threatening to block accounts found involved in such activities.

This action faced backlash, especially from the 33.4 million individuals actively trading cryptocurrencies, many of whom depend on it as their primary income source.

Reports suggest that during the impending Monday meeting, the government might propose a temporary halt in P2P crypto trading to formulate comprehensive regulations effectively governing the space. Alternatively, they might engage crypto stakeholders to devise new rules for better regulation.

While details of the government’s decision remain unclear, the Blockchain Industry Coordinating Committee of Nigeria confirmed the meeting, facilitated by the new Director-General of the SEC, Dr. Emotimi Agama.

Though the SEC hasn’t officially confirmed the meeting, sources close to the commission verified its occurrence, emphasizing that decisions are yet to be finalized.

Previously, in 2021, the CBN prohibited banks from operating accounts for cryptocurrency service providers, later lifting the ban in December 2023. However, concerns arose in February over activities on Binance, the world’s largest crypto exchange, allegedly contributing to the naira’s devaluation.

CBN Governor Yemi Cardoso expressed worry over $26 billion passing through Binance Nigeria from ‘unidentified sources’ in the past year. Subsequently, Binance ceased all naira services, including deposits and trading pairs, from early March 2024.

Lucky Uwakwe, Chairman of BICCoN, aims to find common ground with regulators to address concerns of market manipulation and promote innovation within the industry, aligning with the government’s foreign investment goals.

Similarly, Obinna Iwuno, President of Stakeholders in Blockchain Technology Association of Nigeria, stresses the importance of collaborative efforts to ensure industry compliance and foster innovation without stifling growth.

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