The Securities and Exchange Commission (SEC) has revealed that it is working with the Central Bank of Nigeria (CBN) for a better understanding and regulation of cryptocurrencies in the country.

This is coming after CBN had in February 2021, barred deposit money banks and other financial institutions from doing business with cryptos and other digital assets.

This disclosure was made by the Director-General of SEC, Lamido Yuguda, at the 2021 post-Capital Market Committee (CMC) virtual news conference.

Yuguda said that the commission was in discussion with the CBN for better understanding and regulation of the crypto-assets market, adding that the capital market regulator had suspended the implementation of crypto assets guidelines due to lack of access to Nigerian bank accounts.

What the Director-General of SEC is saying

Yuguda in his statement said, “We are in discussion with CBN for both understanding and better regulating of this market. We will be able to come back to you later to inform you of the outcome of these engagements.

But because of the lack of access to commercial bank accounts, we had to suspend our own guidelines of September 2020. The implementation of that circular is suspended until these operators are able to have access to Nigerian bank accounts.

Remember that nobody operates in the Nigerian capital market if that person does not have access to a Nigerian bank account,” he said.

Yuguda, however, pointed out that SEC had always provided support to Fintechs and had invested so much in developing a framework to support their operations.

He said, “Let me say that the SEC remains very supportive of fintechs. We have invested so much in developing a framework for supporting fintechs in the various areas and fintechs are acting in areas of crowdfunding, investment advice and cryptocurrencies and the like.”

He acknowledged the fact that the fintech market had been disrupted by the CBN’s ban on access to Nigerian bank accounts by the crypto exchange.

He said, “In all other areas, nothing has changed, but in the area of crypto assets, you know that with the recent prohibition by the CBN on access to Nigerian bank accounts by crypto exchanges, that market has been disrupted.

And the truth of the matter is that while the SEC had issued guidelines in September 2020 aimed at regulating this market, for now for all intents and purposes, because these exchanges do not have access to commercial bank accounts in Nigeria, the market, for now, does not exist.’’

In case you missed it

• The apex bank had about 2 months ago, warned the Deposit Money Banks, Non-Financial Institutions and other Financial Institutions against doing business in crypto and other digital assets.
• The CBN directed financial institutions to immediately close the accounts of persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.

David Schwartz, Ripple’s Chief Technology Officer has advised investors and crypto traders to consider offloading some amounts of their crypto holdings to reduce risk. The crypto leader recently made the warning on Twitter.

“This is probably going to be my least popular tweet ever, but: If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure. This is not any kind of prediction about what the market will do,” his tweet stated.

READ: Billionaire investors in Nigeria you may not know

This is probably going to be my least popular tweet ever, but: If you have life-changing amounts of cryptocurrency, please take some time to seriously consider selling some to reduce your risk and exposure. This is not any kind of prediction about what the market will do.

— 𝘋𝘢𝘷𝘪𝘥 "𝘑𝘰𝘦𝘭𝘒𝘢𝘵𝘻" 𝘚𝘤𝘩𝘸𝘢𝘳𝘵𝘻 (@JoelKatz) April 13, 2021

To lend credence to his advice, about $1.39 billion dollars were liquidated in the crypto market arbitrarily with about 240,759 traders liquidated.

The largest single liquidation order happened on Huobi-XRP valued at $11.69 million.

Despite the recent pullback in some trending crypto assets, some crypto traders remain upbeat that crypto assets are the best tools for hedging against rising inflation, offer better returns than many traditional assets, and are set to win more attention from the corporate world.

READ: US moves against misuse of cryptocurrencies, to employ new financial technologies

Many weeks ago, the Financial Conduct Authority, a leading United Kingdom financial regulator, issued a piece of stern advice on the risk associated with trading crypto assets.

The statement highlighted the risks associated with investing in Bitcoin and other crypto-assets and warned the public that there were high chances that all their funds could be lost.

READ: List of unpopular Cryptos likely to outperform

“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.

Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,” said the FCA.