The Nigerian Securities and Exchange Commission (SEC) has threatened “enforcement action” against unregistered crypto companies and individuals involved in secret cryptocurrency transactions.

SEC Director General Emomotimi Agama promised that Nigerian authorities will take tough measures against organizations attempting to provide cryptocurrency services without a license. The agency will conduct checks to see if companies comply with anti-money laundering (AML) and counter-terrorism financing regulations.

“We will certainly take enforcement action against anyone who does not want to operate a regulated business. Those who do not want to play by the rules will not be allowed to operate in our space,” the SEC warned.

In August, the Nigerian financial regulator issued the first temporary licenses to two local crypto exchanges, Busha Digital and Quidax Technologies. Agama explained that the approval of Busha and Quidax in Nigeria was due to the growing interest of young Nigerians in digital assets. The official emphasized the importance of creating a clear regulatory framework in the country that both protects investors and encourages innovation.

In early 2021, the Central Bank of Nigeria (CBN) banned local banks and financial institutions from servicing cryptocurrency exchanges. In March, the regulator clarified that crypto trading is not prohibited in the country, and citizens can freely make crypto transactions.