SEC: Discussion with CBN ongoing over regulation of cryptocurrencies

The Securities and Exchange Commission (SEC) says discussion is ongoing with the Central Bank of Nigeria (CBN) over the regulation of cryptocurrencies.

Lamido Yuguda, director-general of SEC, made this known at the first quarter capital market committee (CMC) virtual conference, on Thursday.

On February 5, the CBN directed banks and other financial institution to close accounts of persons or entities involved in cryptocurrency transactions.

The apex argues that cryptocurrencies pose the risk of loss of investments, money laundering, terrorism financing, illicit fund flows and other criminal activities.

But in his reaction, Vice President Yemi Osinbajo backed the digital assets, saying there is a need for the CBN and SEC to come up with robust regulations for cryptocurrencies.

Speaking at the conference, Yuguda said the commission is in talks with the CBN for better understanding and regulation of the crypto market.

He said that the commission had suspended the implementation of its cryto-assets guidelines due to lack of access to Nigerian bank accounts.

“We are in discussion with CBN for both understanding and better regulating of this market,” he said.

“We will be able to come back to you later to inform you of the outcome of these engagements.

“But because of the lack of access to commercial bank accounts, we had to suspend our own guidelines of September 2020, the implementation of that circular is suspended until these operators are able to have access to Nigerian bank accounts.

“Remember that nobody operates in the Nigerian capital market if that person does not have access to a Nigerian bank account.”

Yuguda noted that SEC remains supportive of fintechs and has invested in developing a framework to support their operations.

He said the cypto market has been disrupted by the apex bank prohibition on access to Nigerian bank accounts by crypto exchange.

“Let me say that the SEC remains very supportive of fintechs. We have invested so much in developing a framework for supporting fintechs in the various areas and fintechs are acting in areas of crowd funding, investment advice and cryptocurrencies and the like,” he said.

“In all other areas, nothing has changed, but in the area of crypto assets, you know that with the recent prohibition by the CBN on access to Nigerian bank accounts by crypto exchanges, that market has been disrupted.

“And the truth of the matter is that while the SEC had issued guidelines in September 2020 aimed at regulating this market, for now for all intents and purposes, because these exchanges do not have access to commercial bank accounts in Nigeria the market for now does not exist.

“We shall continue to engage players and support them to operate lawfully. Our aim is to ensure the delivery of safe products and services without stifling innovation.”

Since the CBN ban in Nigeria, cryptocurrencies have been adopted by top international firms including Tesla Inc., Mastercard, among others.

The Bank of New York Mellon Corp., an American investment banking services holding company, and Goldman Sachs, a multinational investment bank, have also announced plans to offer opportunities in bitcoin and other digital assets.