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Nigeria plans additional rules to combat illegal trading in digital assets

NIGERIA plans to roll out additional rules in the coming days to combat illegal trading in digital assets and ensure that those dealing in such instruments are registered, the head of the Securities and Exchange Commission (SEC) said.

The SEC director general, Emomotimi Agama, told major blockchain and cryptocurrency associations in Nigeria on Monday that the naira currency needs to be delisted from peer-2-peer (P2P) trading to avoid manipulation.

Agama made the comments as the central bank announced new charges on domestic money transfers to tackle cybersecurity.

“I want to seek your co-operation … as we roll out in the coming days the regulations that would take control of these areas,” Agama told the associations.

Officials have clamped down on cryptocurrency, which they blamed for weaknesses in the naira. The Nigerian currency has hit record lows due to dollar shortages as crypto transactions in the country have flourished.

In 2022, the SEC released a set of rules for digital assets, in a bid to try to find a middle ground between an outright ban on crypto assets and their unregulated use.

Nigeria is one of the biggest markets for crypto trading. Its use, mostly by the country’s tech-savvy youths, has boomed in recent years, especially as severe dollar shortages made it difficult for Nigerians to pay for goods and services abroad.

Agama said recent concerns regarding crypto P2P traders and their perceived impact on the naira’s exchange rate to the dollar necessitated “collective action and dialogue within our financial market ecosystem.”

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In March, Binance, the world’s largest crypto exchange, said it would stop all transactions and trading in the naira following Nigeria’s crackdown on crypto exchanges.

The West African country later charged Binance and two of its executives, who are facing separate trials on tax evasion and money laundering, which the company is challenging.

Agama said guidelines for digital asset trading are currently being fine-tuned for proper regulation and will encompass activities within the cryptocurrency ecosystem, from wallet providers to exchange platform providers and brokerage services.