SEC Cautions Crypto Investors About Using Unauthorized Exchanges

The Securities and Exchange Commission (SEC) has declared that only digital exchanges and platforms with official approval are sanctioned to engage in cryptocurrency trading within Nigeria’s borders.

According to a press release available on its official website as of this Monday, the SEC has cautioned the populace to steer clear of unauthorized operators who are yet to seek and obtain approval through either the Accelerated Regulatory Incubation Programme (ARIP) or the Regulatory Incubation Programme (RI).

The SEC has made it clear that ARIP and RI are presently the exclusive channels that allow aspiring firms to legally present their digital offerings and services to the Nigerian capital market.

The agency also advises potential investors to diligently verify through the SEC’s various public resources if the entities presenting investment services are authorized by law to do so.

“Those considering investments are likewise urged to validate the legitimacy of entities claiming to offer such services via the SEC’s multiple information outlets,” the commission reiterated.

The capital market overseer had earlier rolled out the ARIP with the objective of incorporating businesses that commenced operations prior to the formulation of the official Guidelines for Virtual Asset Service Providers in May 2022.

The RI Programme was established with the purpose of evaluating the business strategies of digital asset enterprises and to scrutinize new products, services, and technologies within a controlled market setting under the SEC’s vigilant oversight.

Recently, the SEC granted preliminary approval to two digital asset exchange entities, Busha Digital Limited and Quidax Technologies Limited, while also admitting five firms into the RI Programme for testing their business models and technology.

The SEC’s Director-General, Dr. Emomotimi Agama, connected the approval of the two cryptocurrency exchanges to the burgeoning interest towards digital assets among Nigeria’s youth.

He emphasized the essentiality of an unambiguous regulatory framework that not only facilitates innovation but also ensures investor protection.

Dr. Agama highlighted that detailed disclosures, stringent anti-money laundering policies, and effective strategies against terrorism financing are imperative to the SEC’s regulatory strategy within the cryptocurrency domain.