The Securities and Exchange Commission, SEC, says it has suspended the assessment of digital assets and individuals affected by the cryptocurrency ban of the Central Bank of Nigeria, CBN, until they are able to operate bank accounts.
The SEC in a statement on Thursday made this known while giving clarifications on the implementation of SEC’s Capital Market FinTech Strategy.
The commission stated that the planned implementation of the SEC Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services would continue.
It said, “For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021 is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.”
The SEC said it decided to provide regulatory certainty within the digital asset space last year due to the growing volume of reported flows.
The apex regulator of the nation’s capital market had in September last year described digital assets, including crypto assets, as securities, saying it would regulate them.
Last Friday, the Central Bank of Nigeria ordered banks and other financial institutions in the country to close all cryptocurrency accounts.
SEC in the statement said it had received several comments and inquiries from the public on a perceived policy conflict between its September 11, 2020 statement on digital assets and classification and treatment and the CBN circular of February 5, 2021.
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It said, “We see no such contradictions or inconsistencies. In recognition of the fact that digital assets may have the full characteristics of investments as defined in the Investments and Securities Act 2007, the SEC statement asserts that trading in such assets falls under SEC’s regulatory purview, except proven otherwise
“The primary objective of the statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market.
“The SEC made its statement at the time to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.”
It added, “Subsequently, in its capacity as the regulator of the banking system, the CBN identified certain risks, which if allowed to persist, will threaten investor protection, a key mandate of the SEC, as well as financial system stability, a key mandate of the CBN.”