Cryptocurrency: SEC moves to clamp down on illegal trading

The Securities and Exchange Commission (SEC) has reaffirmed its determination to act decisively to uphold the integrity of the capital market and protect the interests of all investors in a bid to rid the Virtual Assets space of illegal trading activities.

This was stated by Acting Director General of the SEC, Dr Emomotimi Agama on Monday during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN) the umbrella body of all major blockchain and cryptocurrency Associations in the country.

Agama stated that the SEC Nigeria will not hesitate to utilize all the powers within its mandate to handle issues that are negative and pose a threat to national interest, adding that the Commission has 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 the recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the Naira has underscored the need for collective action and dialogue within the financial market ecosystem.

“There are basic practices as enshrined in the Investments and Securities Act 2007 and we expect that everyone will abide by those rules. Some may say no rules to play by, but do not forget that we have the Investments and Securities Act 2007 that some actions by participants today may be violating, hence the law is the law irrespective of the technology used.

“However, for 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”.

The DG stated that the proposed regulatory guidelines which are currently being fine-tuned with suggestions by various stakeholders, will encompass various activities within the cryptocurrency ecosystem.

This, he said, ranges 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, to ensure that every Nigerian playing within the industry with the potentials 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 Tokenization (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 undermines our national interest would not be acceptable. It is therefore very important that we know that the SEC by virtue of the Section 13 of the ISA speaks to the regulation of all capital market activities”.

Agama expressed gratitude to the leadership of Biccon 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.

“With our deep understanding of this industry and the cryptocurrency sub-sector, we recognize 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 posses.

“We must explore innovative solutions to this problem and strike the right balance between encouraging innovation and safeguarding our national economic interests“.

Agama highlighted that one of the things that needs to be done is delisting the naira from P2P space to avoid the level of manipulation that is currently happening, enjoining 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 co-operation in dealing with this as we roll out in the coming days the regulations that would take control of these areas. We want to ensure that this management will ensure that people or institutions that require registration with the SEC are quickly licenced. We assure you that we will give guidance when necessary and do well to streamline the processes to make them less difficult.

“We ask that those involved in sharp practices that undermine national interest should cease and desist. It is in our interest as a people to protect what belongs to us. We encourage you to reach out to us by naming and shaming the bad actors. Together, I am confident that we can weed out bad actors and harness the immense potential of this progressive technology for the benefit of all Nigerians in tandem with this government’s renewed hope agenda,” he added.

In his remarks, the Chairman of the Fintech Association of Nigeria,  Dr. Babatunde Oghenobruche Obrimah commended the Director General for his bold steps and the relationship with the ecosystem and pledged their commitment to work with the DG and grant him all the support that will help him succeed in sanitizing the virtual ecosystem.

On their part, BICCoN requested the setting up of working group to tackle the various challenges facing the crypto space in a bid to move the market forward.

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