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SEC Sees No Contradiction with the CBN’s Prohibition of Financial Institution’s involvement in Crypto



The SEC Sees No Contradiction with the CBN’s Prohibition of Financial Institution’s involvement in Crypto

The Security and Exchange Commission SEC has said it sees no contradiction or inconsistencies with the Central Bank of Nigeria (CBN) restriction on cryptocurrency in Nigeria. The capital market regulator released a statement on the 11th of February, 2021 just 6 days after the CBN published its circular prohibiting banks and other financial institutions from participating in crypto related activities and closing accounts of known individuals or entities involved in cryptocurrency.

See why the Nigerian Senator apposed the CBN’s restriction on cryptocurrencies

The SEC statement read “The Securities and Exchange Commission (SEC) has received several comments and inquiries from the public on a perceived policy conflict between the SEC Statement on Digital Assets and their Classification and Treatment of September 11, 2020 and the Central Bank of Nigeria (CBN) Circular of February 5, 2021. We see no such contradictions or inconsistencies.”

The SEC went further to say:

“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.”

Related article: We Will Not Leave Any Stone Unturned, SEC Speaks on Crypto Regulation

“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. 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.”

Also read: SEC’s Statement on Cryptocurrency is Definitely Progress – Yele Bademosi, CEO

The SEC also agreed to work with the Central Bank to find ways to mitigate the risks identified by the Apex Bank. And will continue to monitor the developments in the crypto space and engage stakeholders in order to create a regulatory structure that will promote economic development, transparent, safe and innovative capital market.

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