Nigerian authorities are targeting unregistered crypto exchanges.

Regulatory standards in the country are presently murky.

The government is locked in an intense legal battle with a top exchange.

The past few months have been marked by severe uncertainty for the local Nigerian crypto industry, driven by escalating tensions between regulatory authorities and crypto exchanges operating within the region. At the heart of the conflict are allegations of currency manipulation and unlicensed operations, prompting the complete exit of various service providers from the country. 

In a step further, a recent announcement from the country’s regulatory watchdog suggests that the tussle is far from over.

Nigeria’s SEC to Turn Up Heat on Crypto Exchanges

The Nigerian Securities and Exchange Commission (SEC) has reportedly promised enforcement actions against defying crypto exchanges operating within its jurisdiction. According to local media Nairametrics, on Monday, September 9, 2024, the commission’s director-general, Dr. Emomotimi Agama, announced incoming regulatory actions against non-compliant business entities, including crypto exchanges. Sponsored

This move reportedly comes amid the commission’s growing focus on crypto exchange activities within the country and its efforts to ensure that such businesses do not negatively impact the local economy.

“We are certainly going to commence enforcement actions on anyone who wants to operate in this market without the intention of being regulated. For those that do not want to play with the books, we will not allow them to operate within our space,” stated Agama according to the report. 

While the Director General reportedly stated that the SEC has received numerous applications from license hopefuls, he stressed that only those meeting the commission’s strict regulatory standards will be approved.

The SEC’s latest comments suggest a potential continuation of the nation’s earlier enforcement actions against service providers.

Nigeria v Crypto Exchanges Showdown

In February 2024, the Nigerian government locked horns with several crypto service providers, alleging that their operations dealt a significant blow to its local currency, Naira.

The conflict quickly escalated, and the country pressured exchanges such as Binance, KuCoin, and OKX to cease operations involving the Naira while blocking user access to their various platforms. 

Nigerian authorities also detained two of Binance’s executives amid the latter’s efforts at resolution, which has resulted in the six-month long detention of one of the exchange’s executives in a local prison.

To date, local users in Nigeria still face restrictions when accessing crypto platforms, and the regulatory dispute with Binance remains unresolved.

On the Flipside

On August 29, 2024, the SEC granted Approval-In-Principle to two local exchanges.

Nigeria’s tax authority, FIRS, is reportedly considering a guideline reform to include cryptocurrency taxation.

The detained Binance executive is facing money laundering charges from the Nigerian Economic and Financial Crimes Commission (EFCC), with reports of worsening health conditions as he remains in detention.

Why This Matters

Regulations in the crypto industry are becoming increasingly common, and Nigeria SEC’s move to ensure compliance echoes the ongoing global push for oversight on the crypto industry, However, it is important for authorities to strike a balance between regulation and innovation to avoid stifling the growth of emerging sectors with aggressive enforcement actions.

To better understand the ongoing Binance-Nigeria legal tussle, read this article:UPDATED: “It’s a Lie!”: Gambaryan Cries Out as 2nd Bail Hearing Ends in Deadlock Here’s how crypto bets for the upcoming US elections are faring:Trump Tops Polymarket Bets as Support for Harris Rises 

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