The involvement of regulatory bodies in finance plays a critical role in setting guidelines and safeguarding investors. The Securities and Exchange Commission (SEC), for instance, is dedicated to both fostering innovation and ensuring investor protection.
At the SiBAN’s Digital Assets Summit in Abuja, Ms. Janet Ekaette, the Divisional Head of Digital Exchanges at the SEC, shed light on the SEC’s collaboration with the blockchain ecosystem.
She said that the SEC has been actively involved in the blockchain and cryptocurrency space since 2017, reflecting on its commitment to engage directly with blockchain enthusiasts and provide regulatory clarity to foster innovation in the industry.
The Divisional Head noted that one of the significant steps taken by the SEC was the issuance of a classification statement in 2018. This statement clarified that the SEC would regulate cryptocurrency and blockchain activities in Nigeria, provided they were deemed securities.
Prior to this classification, the SEC closely collaborated with the blockchain community, including the formation of a virtual committee tasked with formulating these classifications.
Fintech office in 2018
She added that to further enhance engagement and understanding, the SEC established an Innovation and Fintech Office in 2018.
This office was dedicated to interacting with fintech innovators and understanding the developments within the fintech space.
It allowed innovators to directly engage with the regulatory body, fostering collaboration and knowledge sharing.
Furthermore, she said that the SEC’s commitment to supporting fintech and blockchain innovation led to the creation of a regulatory sandbox framework.
This framework enables fintech innovators to navigate the regulatory landscape of the Securities and Exchange Commission.
While the specific rules for digital assets and blockchain are not yet operational, the SEC launched a regulatory incubation program in April of this year.
The program welcomed innovative business models, including blockchain-based solutions, for consideration and review.
Ms. Janet also noted that the SEC has also been actively addressing anti-money laundering (AML) and travel rule compliance in the blockchain space.
The SEC is working in alignment with government regulations to ensure effective enforcement of AML laws.
She advised blockchain developers to engage with the SEC before initiating any product development.
There are professionals, advisors, and other stakeholders who will help builders create products that are in line with the industry standards being set by the commission.