The Securities and Exchange Commission (SEC) has predicted that the nation may exit the grey list soon with the inclusion of digital assets regulation in the recently signed Investments and Securities Act 2025 by President Bola Ahmed Tinubu.
Director General of the SEC, Dr. Emomotimi Agama who stated this in Abuja explained that the inclusion of digital assets in the ISA 2025, provides the country with an avenue to exit the grey list as the new law aims to curb fraudulent activities in digital space, fostering trust and innovation in block chain technologies.
Nigeria was placed on the Financial Action Task Force (FATF) “grey list” (meaning increased monitoring) on February 24, 2023, alongside other jurisdictions, due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) regime.
According to the SEC DG, ‘’It may interest you to know that the AML CFT issue is what brought about our inclusion in the grey List, the inclusion of this law, today provides us an avenue to exit that grey list and that is very critical to the international community. We are telling the international community that we are ready for business and we are ready to protect every business that operates within Nigeria and all those involved in such activities within Nigeria”
Agama emphasized that trading in cryptocurrencies does not translate into a weaker naira as he said the Commission is going to provide guidance for all the actors to ensure that their acts does not go against the national interest.
He said, “This SEC now has the power to clamp down on such entities. So we encourage everyone who is in this space to come under regulation to seek clearance, to seek guidance for whatever reason, and we are ready and able to provide solid guidance so that at least the national economic interest is truly protected. So we believe that the regulation, the law itself, will bring succor to them, because once clarity is provided, they are safer in dealing in this kind of businesses.
“The essence of regulating is to provide fences around the institutions, the products, the persons involved in it, and to make sure that they do not involve in things that are illegal. It is important also to note that we are working with the Central Bank of Nigeria, the Economic and Financial Crimes Commission, Nigeria Financial Intelligence Unit, the Office of the National security Adviser on the regulation of this space, in order that it should not be inimical to the existence of Nigeria as a country. What we are doing is to make sure that everyone that is involved in this space is properly guided, because for every investment, even when it is a traditional investment, there’s usually the risk aspect of it. That risk aspect of it is what we are managing”.
Agama disclosed that the Commission is currently carrying out moderated regulation as it is not possible to grant licenses to all those that have applied to operate in the space at the same time.
He said, “The SEC currently has two programmes the Regulatory Incubation Programme and the Accelerated Incubation Programme which are tools that will aid in evaluation of the risks that the institutions pose to the Nigerian economy and its citizens.
“It is a process and in the next quarter, we are going to release the next cohort, and after the evaluation of what has happened in the last two quarters, we are going to do that release in this next quarter. We are happy to note that the processes around that is almost concluding, and we will inform the public of the outcome very soon”.
Agama said in a bid to deal with challenges that may arise in the process of regulation, the Commission is introducing risk management as a legal instrument to guide the operations of the capital market operators and the issuances of securities, to be able to mitigate any risk that will arise in the nearest future.
“Now, once this happens, the tendency is that investors will be more confident, because they know that we have their back. That certainly will improve investor protection. Therefore, KYC is also beefed up through the risk management process today. That also helps us to be able to seek out genuine investors from people who do not mean well for the market, and that also will improve investor’s protection,” he added.
