The Nigerian Securities and Exchange Commission (SEC) has set up a new fintech division to study crypto investments. The regulator’s new division was revealed in an interview by Lamido Yuguda, the director-general of the SEC, who stated the new SEC’s fintech division is solely dedicated to researching crypto assets, blockchain technology, and crypto-related investments.
In the wake of the rising popularity of crypto assets this year, the Nigerian securities regulator saw fit to establish a new division focused on crypto assets. The need for regulations was prompted by the numerous crypto-related scams in the state as Nigeria becomes the ideal hunting ground for fraudulent activities and schemers. There have been several cases of fraud and scams that resulted in investors losing money to schemers that took advantage of Nigeria’s lack of regulatory laws surrounding crypto assets.
During the interview, the director-general of the Nigerian SEC explained that the fintech division aims to learn and gather more information for the agency to regulate crypto assets. Yuguda added that the fintech division will be established if the Central Bank of Nigeria’s directive, which was implemented on February 6 to halt crypto operations, is lifted. Yuguda did not provide the time frame for implementing regulations, nor did he stated when the central bank’s directive will be removed.
According to the director-general, the securities regulator prioritizes the protection of investors and their investments in blockchain technology. In order to protect investors, the Nigerian authorities including the SEC have issued warnings, while the central bank went as far as to impose sanctions on the crypto industry’s access to the banking sector. The SEC will only implement the regulations if the central bank’s directive is lifted.
Despite what the SEC and the central bank states, Nigerian crypto enthusiasts speculate the real reason for the regulations is due to the increasing depreciation of the naira, Nigeria’s national currency. The shortage of foreign exchange and the growing demand for accelerating naira’s depreciation against major currencies adds to the need to implement regulations as cryptocurrencies are another way the residents can preserve value other than naira.
The authorities banned crypto and non-crypto entities in response to the economic situation. The CBN recently took action against 6 fintech companies for allegedly violating their operations license. Despite the CBN’s hardline approach, the SEC insists to work with fintech firms to boost domestic securities.
