SEC Approvals Not Licenses for Crypto Firms

Crypto Firms Get SEC Approval, Not License

The Securities and Exchange Commission (SEC) is taking a cautious approach to regulating...

The SEC clarifies that crypto firms have received approvals, not full licenses, highlighting the distinction between the two.

The Securities and Exchange Commission (SEC) has clarified that its recent approvals for crypto exchanges are part of a controlled experiment to protect investors and the Nigerian economy.

SEC Director-General, Emomotimi Agama, made this statement on Wednesday, September 4, during a meeting in Abuja, explaining the commission's approach to regulating the crypto space.

In August, the SEC granted approval-in-principle to Busha Digital Limited and Quidax Technologies Limited to operate under the Accelerated Regulatory Incubation Programme (ARIP), marking a significant step in the commission's efforts to regulate crypto exchanges.

“It gives us an opportunity to know exactly what they are doing, we know the risks that they pose to our economy, we know the risks they pose to investors and the risks they pose to themselves as operators,” Agama said.

“The idea is you need to do that to be able to study them and provide all the guidance and regulations required by them to operate in the system seamlessly while also not defrauding Nigerians, not causing chaos to Nigerians, our economy and the entire system at large.

“We are making sure that they operate within regulations similar to what is obtainable also in other jurisdictions.”

According to Emomotimi Agama, SEC Director-General, the approval-in-principle granted to Busha Digital Limited and Quidax Technologies Limited aligns with the commission's objective of empowering Nigerian youths to participate in the capital market.

Agama stressed the need for frameworks that encourage young people and other Nigerians to engage with the market, fostering a more inclusive and vibrant capital market ecosystem.

“It is important that we act accordingly, we are a country but we cannot be left out of the global phenomenon that is beginning to take shape,” the SEC boss said.

“The SEC, as a future looking institution, is poised to making sure that we are in the league of countries that do what is needed.

“As much as possible, we are building talents to be able to deal with the challenges that these asset classes could bring to our shores.

“A lot of young Nigerians are fully involved in it and we cannot shut the door against them, rather the intention of Mr. President is to have them inclusive in the capital market and that is why we are ensuring that there is regulation and no one is hurt at the end of the day. That's our responsibility at the SEC by protecting investors and developing the market.”

The Securities and Exchange Commission (SEC) is taking a cautious approach to regulating digital asset exchanges, with Director-General Emomotimi Agama stating that the agency is implementing measures to minimize risks to the national economy and protect investors.

Agama noted that the SEC's regulatory framework for digital asset exchanges is based on its existing guidelines for virtual asset service providers, ensuring a consistent and robust approach to oversight.

According to Emomotimi Agama, SEC Director-General, the crypto industry's distinct features require tailored regulations that enable the commission to comprehensively understand crypto exchanges and virtual financial asset service providers.

Agama explained that this approach originated from the SEC's initial regulatory incubation program, which aimed to examine fintech platforms and innovative market products, ultimately informing the commission's regulatory framework.

“In our bid not to stifle innovation we decided to set up a sound box to be able to understand exactly what these companies are getting into, how it affects the customers, how it affects the Nigerian public and how it affects the Nigerian economy,” the SEC boss said.

“That was the idea, soon after that with the emergence of the VAPS regulation, we thought it wise to move forward by setting up the accelerated regulatory incubation programme.

“The first stage is the regulatory incubation programme, the next stage is the accelerated incubation programme which takes care of the desires of a lot of institutions to be regulated by the SEC.”

Agama emphasized that a lack of regulation in the crypto industry can jeopardize economic stability, highlighting the importance of establishing a trusted framework to build investor confidence.