The Securities and Exchange Commission (SEC) of Nigeria has flagged ToFro, a cryptocurrency trading platform, as operating without proper registration.
The SEC has a broad initiative to regulate the burgeoning crypto market in Nigeria, aiming to protect investors and ensure compliance with financial laws.
Emomotimi Agama, the Director-General of the SEC, emphasized the importance of regulatory compliance for all crypto operators. He stated that any platform offering cryptocurrency services without adhering to the established regulations would face enforcement actions. This includes potential fines starting at 5 million Naira and additional daily penalties for ongoing violations.
The Investments and Securities Act 2024, signed into law by President Bola Tinubu classifies cryptocurrencies as securities, thereby bringing them under the regulatory purview of the SEC . The Act also imposes stricter penalties for financial misconduct, including hefty fines and potential imprisonment for those operating without proper authorization.
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To operate legally, crypto exchanges in Nigeria must obtain a Virtual Asset Service Provider (VASP) license from the SEC. This requires meeting stringent criteria, such as maintaining a minimum paid-up capital of 500 million Naira and securing a fidelity insurance bond covering at least 25% of this amount.
Additionally, exchanges must implement comprehensive customer verification procedures and report suspicious activities.
The crypto market in Nigeria keeps growing, with an estimated worth of over $400 million. The SEC’s regulatory measures are crucial in maintaining market integrity and investor confidence. Its actions reflect a commitment to fostering a secure and transparent crypto ecosystem in Nigeria. By enforcing these regulations, the Commission aims to protect investors from fraudulent activities and ensure that only compliant platforms operate within the country’s financial landscape.
