Nigeria’s Securities and Exchange Commission (SEC) has put plans on hold on previously announced intent to regulate cryptocurrencies amid the country’s recent ban on crypto trading. Last week, the Central Bank of Nigeria (CBN) ordered financial institutions to suspend the banking accounts of those dealing in cryptocurrencies. According to the central bank, cryptocurrency transactions posed risks to the economy.
Nigeria’s SEC Crypto Regulation Plan Now on Hold
Nigeria’s SEC released a statement saying any plans to regulate the cryptocurrencies are now on hold following the Central Bank of Nigeria (CBN) ordering banks to close any accounts of those transacting with cryptocurrencies.
In early Feb, the CBN released a letter saying banking institutions dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges are prohibited and any breaches of the order would face severe regulatory sanctions. Meanwhile, in September 2020, Nigeria’s SEC said that cryptocurrencies are exchangeable securities saying regulation would be provided for investor protection as well as transparency.
The regulatory agency specified that it was necessary to release a statement due to several comments and inquiries from the public that there is a conflict between the SEC statement on Digital Assets and their Classification and Treatment of September 11, 2020, and the Central Bank of Nigeria (CBN) Circular of February 5, 2021.
In a released statement, SEC said:
“For the purpose of admittance into the SEC regulatory incubation framework, the assessment of all persons and products affected by the CBN circular of Feb. 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.”
Nigerians Flocking to P2P Crypto Trading
The SEC, therefore, has agreed to work with the Central Bank of Nigeria to work together to further analyze, and better understand the identified risks to ensure that appropriate and adequate mitigants are put in place, should such securities be allowed in the future.
Despite the cryptocurrency ban in Nigeria, the Nigerian cryptocurrency communities are using peer-to-peer exchange platforms to continue their cryptocurrency trading.