The Securities and Exchange Commission (SEC) says Nigeria is a key player in the cryptocurrency market, especially in peer-to-peer transactions.
Director-General of SEC, Emomotimi Agama, spoke at the opening of the 2024 International Organisation of Securities Commissions (IOSCO) World Investor Week (WIW).
Agama, represented by Executive Commissioner, Operations of SEC, Bola Ajomale, said the market is still very volatile, making investor protection crucial.
Also, he said the SEC has developed and implemented frameworks for regulating virtual asset service providers (VASPs) to address concerns such as fraud, money laundering, and market manipulation, while fostering innovation.
“Our frameworks balance the need to encourage innovation within a safe, regulated environment whilst maintaining investor protection,” Agama said.
Continuing, he explained, “Crypto assets must be subject to clear regulatory oversight that ensures market integrity without stifling growth.
“Through this approach we have created a regulatory incubation programme within which new technologies and digital assets can be tested and approved for public use.
“The SEC has also developed an accelerated regulatory incubation programme specifically to encourage non-registered crypto operators (who are currently extremely high risk and banned) to present themselves for regulatory oversight.
“I must also add that as the aforementioned framework continues to evolve, enforcement action against illegal crypto platforms, ponzi schemes and market abuse will significantly increase in severity.”
He said sustainable finance is not only a global priority, but also a pressing issue for Nigeria as environmental, social, and governance (ESG) factors are becoming more important in investment decisions.
Agama said while Nigeria celebrates the growth of its market, stakeholders must also recognise the evolving risks that come with global market interconnectedness.
He said Nigeria is not insulated from economic volatility, cybersecurity threats, and financial crimes like fraud and market manipulation.
Agama said investor education is fundamental to building a healthy market and the development of market confidence.
He noted that a well-informed investor base is crucial for the stability and growth of any capital market.
Agama said investor education empowers individuals to make informed decisions while protecting themselves from fraud, Ponzi schemes, misinformation and excessive risk.
According to the DG, Nigeria has witnessed increasing participation in the capital market, with more retail investors entering the fold.
“As financial products become more complex and technology-driven, from fintech innovations to cryptocurrency trading, it is critical and responsible for stakeholders to commit to equipping investors with the knowledge to navigate these markets confidently and responsibly,” he said.
“World Investor Week provides a platform for us to reinforce this commitment. Throughout this week, we will engage with investors, discuss best practices, and focus on improving transparency and accountability in financial markets.
“I encourage all participants to take these opportunities to learn and share knowledge, so we can continue building a robust, investor-friendly ecosystem.”
Agama said the focus for 2024 is apt and extremely timeous as it covers technology and digital finance, crypto assets and sustainable finance.
He said the three critical sectors will significantly influence the future of global capital markets, adding that while the potential rewards are immense, the associated risks are equally enormous.
Reaffirming the SEC’s commitment, Agama said the commission would continue to collaborate with exchanges and other stakeholders in Nigeria’s capital market to uphold the highest standards of transparency, fairness, and investor protection.
