SEC suspends plan to regulate cryptocurrencies, ask dealers to open bank accounts

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Nigeria’s Securities and Exchange Commission has suspended previously announced plans to regulate cryptocurrencies, until those dealing in them are able to open bank accounts in the West African nation.

Last week, the Central Bank of Nigeria ordered financial institutions to close accounts dealing in cryptocurrencies, saying the transactions posed risks to the economy, but those measures are now on hold.

“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,” the Abuja-based SEC said in an emailed statement.

The agency said in September it viewed cryptocurrencies as exchangeable securities and would regulate them to provide protection for investors and to ensure the transactions are transparent.

Following risks identified in the transactions by the central bank, the SEC “engaged with the CBN and agreed 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,” it said in its latest statement.

In 2018, the Nigerian central bank warned cryptocurrencies were not legal tender, and that investors were unprotected.

Still, monthly cryptocurrency transfers to and from Africa of under $10,000 jumped more than 55% in a year to reach $316 million in June, data from U.S. blockchain research firm Chainalysis showed.

In Nigeria, the data showed small cryptocurrency transfers totalled nearly $56 million in June, nearly 50% more than a year before.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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