Skip to content Skip to sidebar Skip to footer

Crypto Regulation: New DG of SEC Nigeria to meet virtual assets service providers.

by Edison Irabor

The Blockchain Industry Coordinating Committee of Nigeria (BICCON), the intercommunity team in Nigeria’s blockchain industry, has extended an invitation to all virtual asset service providers (VASPs) to attend a meeting with the new Director-General of Nigeria’s Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, to address pertinent issues in the industry. 

Expected participants are digital assets offering platforms (DAOPs), digital assets issuers, digital assets exchanges (DAXs), digital assets custodians (DAC), crypto wallet providers, relevant industry associations, and other players in the industry.

The meeting, remote, is being convened on the invitation of the new SEC boss.

According to BICCoN, the goal of this regulatory engagement is to “chart a progressive course for crypto regulations in Nigeria”. The engagement will be a virtual assembly scheduled for Monday, 6 May 2024.

In recognition of the importance of collaborative dialogue, Dr. Agama seeks to engage with key stakeholders within the blockchain and cryptocurrency ecosystem to address pertinent regulatory challenges and opportunities.

Date: Monday, 6th May 2024

Time: 10.00AM WAT prompt

Venue: Google Meet Platform

Prior to assuming his role as Director General, Dr. Agama served as the Deputy Director and Head of Registration, Exchanges, Market Infrastructures, and Innovation Department at SEC Nigeria. He also played a pivotal role in spearheading initiatives such as the Nigerian Capital Market Master Plan (2015-2025) and the revitalization of the commodities market. He brings considerable wealth of experience and expertise to his new role at SEC.

Related: Nigeria blockchain industry confident Emomotimi Agama’s appointment as new DG of SEC could “turn the tide”.

The Program

The program, as circulated by BICCoN, is reproduced below:

1. Opening Remarks by Dr. Emomotimi Agama, Director General, SEC Nigeria

2. Presentations by Industry Associations:

– Blockchain Nigeria User Group (BNUG)

– Cryptographic Development Initiative in Nigeria (CDIN)

– Digital Currency Consortium (DCC)

– Stakeholders in Blockchain Technology Association of Nigeria (SiBAN)

3. Q&A Session

4. Closing Remarks

As stated in the announcement shared with CAB, “Everyone’s presence and insights are invaluable as we collectively navigate the regulatory terrain and strive towards fostering an environment conducive to innovation and growth within the blockchain and cryptocurrency sector.”

Established 28 January 2021, BICCoN emerged from stakeholder discussions initiated 13 January 2021 to address crypto scams in Nigeria. BICCoN’s mandate is to bring industry stakeholders together from various blocks in order to aggregate industry interests, ensuring that while opportunities in the blockchain industry are maximized, threats are minimized through collaborative efforts with both innovators and regulators.

Related: BICCoN hits back at CBN’s crusade against Crypto, Nairametrics

Industry Stakeholders’ Expectations 

Lucky Uwakwe, the BICCoN Chairman, in a chat with a CAB correspondent, expressed his expectations for the engagement with the boss of the capital market regulator. According to Mr. Uwakwe, “At BICCoN, being the coordinating committee in Nigeria’s blockchain industry, we wish to try and make the industry  more compliant. By doing so, we will be able to remove bad actors that abuse the use cases of the blockchain technology, including the recent concerns raised by the Nigerian government about market manipulation.”

Also, Mr. Uwakwe emphasized the need to drive foreign direct investments (FDISs), pointing out that innovation in the industry needs to be encouraged in order to enable the industry to gain more FDIs that will support the current administration’s drive for foreign investments into the nation.

In March 2024, BICCoN, which is currently comprised of delegates of Blockchain Nigeria User Group (BNUG), Cryptographic Development Initiative in Nigeria (CDIN), Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), and select industry stakeholders, had submitted written comments to the SEC. This was in response to the SEC’s invitation to the members of the public on 15 March 2024 to submit comments following the release of the proposed amendments to the SEC Rules on digital assets in Nigeria’s capital market. The proposed amendments included additional requirements for VASPs in Nigeria for the purpose of registration and licensing. 

Amongst other proposed amendments, the SEC proposed that a company seeking to operate as a VASP shall be incorporated and have an office in Nigeria, and its Chief Executive Officer/Managing Director or its equivalent shall be resident in Nigeria. In response to this proposal, as seen in the written comments shared with CAB, BICCoN commended the SEC. BICCoN observed that “to maintain adequate supervision and monitoring of operators, it is important that these operators are fully established in Nigeria as legal entities and have a chief accounting officer that is resident in the country.” 

Also, regarding registration and licensing fees for various categories of VASPs, the SEC proposed to increase the fees for application, processing, registration, and sponsored individuals for Digital Assets Offering Platforms (DAOPs) and Digital Assets Exchange (DAX). Moreover, application, processing, and registration fees as well as minimum paid-up capital and fidelity bond were proposed to now also apply to Digital Asset Custodians (DACs). To these proposed increments, BICCoN observed that while it understands that the SEC may have considered the need to further limit risks in the market by raising the bar on prudential requirements, “the proposed amendments make the licensing requirements restrictively high, particularly for local operators.” To this challenge, BICCoN offered two alternative recommendations. BICCoN recommended that the SEC consider reducing the licensing fees. Alternatively, the SEC should consider introducing a dual licensing fee system whereby local VASPs would have a lesser fee and share capital & fidelity bond compared to their foreign counterparts. According to BICCoN, this is because the digital assets industry, particularly in Nigeria, is still at its nascent stage. Therefore, BICCoN believes that the SEC should adopt and implement policies that encourage local participation in order not to affect Nigeria’s global competitiveness in the emerging digital assets sector.

Against the backdrop of the ongoing crackdowns being witnessed in Nigeria’s promising but bumpy digital assets market, including the crypto sector, industry stakeholders are generally  hopeful. The hope is that with proper engagements with industry operators and stakeholders, the new SEC boss will help to turn the tide towards enabling Nigeria to balance innovation with regulation, and not annihilate the nascent industry that they believe is often misunderstood.

Mr. Uwakwe hopes that Nigeria gets it right for both innovation and regulation. In his words, “Nigeria needs regulation that protects Nigerian users, incentivizes locally owned businesses, and supports foreign businesses that serve the Nigerian market, so that we achieve balance on all sides.”

Related: BICCoN calls for responsible regulation of cryptocurrencies in Nigeria, Cryptotvplus