Nigerian Finance Minister Asks SEC to Address Cryptocurrency Regulation

Nigeria’s Finance Minister Wale Edun has called for cryptocurrency regulation as the country introduces a new Securities and Exchange Commission (SEC).

Local media quoted Edun as calling on the SEC to address the complexities of cryptocurrency regulation.

According to the minister, cryptocurrencies are a “fast-growing” and “complex” sector, and as such, he believes that strict oversight is necessary to maintain the integrity of the Nigerian capital market.

The minister’s comments were made during the inauguration of the board in Abuja.

The seven-member SEC board was approved by President Bola Tinubu on April 19, 2024. It comprises SEC Chairperson Mairiga Katuka, Chief Executive Officer Emomotimi Agama, Executive Commissioner for Legal and Enforcement Frana Chukwuogor and Executive Commissioner for Operations Bola Ajomale.

Since the board’s appointment, the SEC has revealed plans to update its regulations on digital asset issuance, offering platforms, exchanges, and depositories. This has included the introduction of a special compliance program called the Accelerated Regulatory Incubation Program (ARIP) to help crypto entities adapt to local requirements.

Edun, however, believes these improvements are not enough. He warned that crypto entities could take advantage of the country’s minimal registration requirements and called for the implementation of corporate governance practices.

“We also need to be careful about regulatory arbitrage,” Edun warned, adding that the commission must “quickly identify and disclose conflicts and follow global best practices.”

He further stressed the need to remain informed and proactive, pointing to the rise of digital currencies, artificial intelligence (AI) and overall digital transformation.

“Unlike mainstream industries with established technologies, the financial sector is evolving rapidly… To provide the necessary approvals and guidance, the SEC must remain informed and responsive.”

Katuka responded to the minister by assuring that the SEC will strive to create a more prosperous and resilient financial ecosystem. He also expressed optimism about Nigeria’s future economic prospects, adding that the reforms of the current administration “are generating economic growth.”

Nigerian regulators are eyeing the use of new technologies to boost their economy. On July 4, the Nigerian National Information Technology Development Agency announced plans to implement research centers focused on key technologies such as blockchain and AI.

The developments follow Nigeria’s legal dispute with cryptocurrency exchange Binance and its CEO Tigran Gambaryan, who has been detained by the Economic and Financial Crimes Commission (EFCC) since February.

Despite accusations from U.S. lawmakers that the accusations were baseless, Nigeria has defended due process.