Nigerian lawmakers push for cryptocurrency regulation to enhance accountability and investor protection

A move towards regulating cryptocurrency in Nigeria has been initiated by lawmakers, with a focus on enhancing transparency, accountability, and investor protection. Senator Osita Izunaso, Chairman of the Senate Committee on Capital Market, has called upon the Federal Government to take steps towards regulating cryptocurrency. This call was made during a press briefing in Abuja following the committee's private screening of Dr. Emomotimi Agama, the designated Director-General of the Securities and Exchange Commission (SEC), alongside three executive commissioners.

Senator Izunaso emphasized the necessity of regulating cryptocurrency due to its widespread use among Nigerians. He expressed concern over the unregulated flow of money in the crypto market. Senator Izunaso argued, "You can't prevent people from trading in the crypto market, so if we can't stop them, we must regulate it."

Senator Izunaso further highlighted the potential benefits of developing both the capital market and the crypto market, stating, "Developing our capital market and our crypto market will bring more liquidity into the system."

Thses remarks come amid a backdrop of significant changes in Nigeria's stance towards cryptocurrencies. In December 2023, the Central Bank of Nigeria (CBN) lifted a three-year ban on financial institutions conducting business with cryptocurrency entities, signaling a shift towards greater acceptance of digital currencies. However, this positive development was overshadowed by the country's ongoing foreign exchange (FX) challenges, leading to a crackdown on unofficial FX marketplaces, including peer-to-peer cryptocurrency exchanges. 

Crypto giant Binance has been notably affected by this crackdown, with two of its officials arrested in February as part of an investigation into the cryptocurrency exchange. While one official managed to escape custody, Tigran Gambaryan remains in detention.