NigeriaVsBinance

In a significant transformation of its financial legislation, Nigeria now acknowledges cryptocurrencies as securities under its revamped capital market regulations. This historic move paves the way for enhanced clarity and a potential spike in investment activities.

Recently, President Bola Tinubu endorsed the updated Investments and Securities Act (ISA) 2024, thereby superseding the previous ISA No. 29 of 2007, and formally integrating cryptocurrencies and digital assets into the country’s legal framework regarding securities.

The recently enacted legislation unambiguously identifies virtual/digital assets and investment contracts as securities, placing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges within the regulatory oversight of the Securities and Exchange Commission (SEC).

Consequently, enterprises engaged in digital asset transactions are mandated to register with the SEC and adhere to its established regulations. This measure is vital in mitigating the risk of fraud within the digital domain, simultaneously nurturing confidence and promoting the advancement of blockchain technologies.

Emomotimi Agama, the Director-General of the SEC, commended the groundbreaking decision, highlighting it as a pivotal enhancement for the capital market. He noted that the fresh legislation is set to amplify investments in digital assets.

In its early stages, Nigeria reacted apprehensively to the burgeoning presence of cryptocurrencies, which began to rise in prominence around 2015, after a downturn in oil prices precipitated a devaluation of the naira.

Cryptocurrencies such as Bitcoin emerged as a refuge for numerous Nigerians, propelling the nation to the position of the world's second-largest cryptocurrency market, trailing only behind the United States.

This increased appetite for digital currencies further exacerbated the strain on the naira’s exchange value.

In an attempt to stem this tide, the Central Bank of Nigeria (CBN) directed financial institutions to shut down any accounts tied to cryptocurrency dealings, an action intended to suppress the burgeoning crypto trade.

As a result of the restrictions, traders resorted to covert methods, turning to peer-to-peer (P2P) platforms to maintain their operations. Binance, a significant player in the global crypto exchange arena, promptly adjusted to the situation by introducing P2P services tailored for Nigerian clientele.

With the inauguration of President Bola Tinubu in mid-2023 and the appointment of Olayemi Cardoso as the governor of the Central Bank of Nigeria, there was a noticeable softening in the government's position on cryptocurrencies. This indicated a potential change in Nigeria's regulatory strategy towards digital assets.
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