Nigeria's SEC to License Crypto Exchanges As Soon as This Month

Nigeria’s SEC is planning to license crypto asset service providers in response to the undeterred adoption of the technology by citizens

Nigerian regulators appear to be pivoting towards regulating the crypto sector after months of a heavy-handed crackdown.

What Happened: The Securities and Exchange Commission (SEC) of Nigeria is planning to license crypto asset service providers as early as this month, according to a Bloomberg report Tuesday.

The report said the agency planned to start issuing these licenses as soon as this month, citing statements by Director-General Emomotimi Agama to correspondents.

Agama, who described himself as “a crypto enthusiast,” said the agency wanted to ensure that the country’s large and crypto-savvy youth did not miss out on the benefits of the sector.

The statements mark a departure from a crackdown in February 2024, during which the country pressured leading exchanges to delist the naira while blocking user access to their platforms.

Meanwhile, in March 2024, the country’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC) and the country’s tax authority, the Federal Inland Revenue Service (FIRS), charged Binance with money laundering and tax evasion, respectively, in a legal battle that has seen an exchange executive incarcerated for nearly six months.

The SEC has not been the only Nigerian agency to pivot towards regulations in recent days.

On Saturday, FIRS Chairman Zaach Adedeji reportedly disclosed that the agency is preparing a massive tax reform bill for lawmakers to consider. The regulator said the bill will also introduce guidelines for cryptocurrency taxation.

The FIRS chairman said the agency planned to formulate crypto regulations in a manner that would not harm Nigeria’s economic progress.

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Why It Matters: The Nigerian government has been cracking down on the crypto sector in recent months over claims of currency manipulation, money laundering, and terrorism financing.

Several leading crypto exchanges, including Binance, OKX, and KuCoin, were forced to remove the naira from their peer-to-peer (p2p) platforms as part of the crackdown, cutting off most users from their preferred crypto on and off ramps.

The move impacted crypto adoption in the country, which had been using p2p trading to circumvent capital controls and a banking sector largely hostile to crypto.

Despite the crackdown, crypto adoption in Nigeria has remained high, with the country ranking among the top 10 in the Chainalysis 2023 Global Crypto Adoption Index.

The pivot towards licensing and regulation by Nigerian regulators could signal an attempt to balance concerns over financial crime and capital flight with the need to support a thriving crypto sector.