The World Federation of Exchanges has stated that Crypto-Asset Trading Platforms should be subject to the same stringent regulations as existing regulated exchanges.
According to The PUNCH, that was revealed in the exchange’s most recent study, titled “Good Markets for Good Outcomes: The Role of Governance in the World’s Exchanges.”
The Central Bank of Nigeria lifted a restriction on cryptocurrency transactions on Friday. The prohibition was lifted years after the 2021 directive, which prohibited banks and financial institutions from dealing in or supporting transactions in crypto assets due to money laundering and terrorism funding risks.
The most up-to-date circular said, “From the commencement of these regulations, Fl shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines.”
However, the CBN stated that banks were still prohibited from trading, holding, or transacting in cryptocurrencies.
According to the WFE’s most recent report, the failures of multiple crypto trading platforms warrant heightened attention in regulating them in the same way that conventional regulated exchanges are governed.
“The World Federation of Exchanges recognizes the benefits that technological innovation can bring to financial markets. Our remarks here should not be interpreted as an attack on the numerous respectable and innovative enterprises involved in the development and promotion of crypto or any other technology.
“The WFE supports governments and regulators in subjecting crypto-asset trading platforms to the rules and laws governing exchanges to achieve a technology-neutral approach to regulation.”
According to reports, the worldwide cryptocurrency market capitalization tops $1 trillion.
WFE stated that the request for rules was based on a succession of market failures that were “not generally related to crypto or the underlying technology.” Instead, failures were caused by a basic lack of effective procedures and controls, poor governance, management inexperience, a lack of segregation of client funds, severe conflicts of interest, and possibly even fraud in several cases.
Meanwhile, following the crypto prohibition in 2021, the Securities and Exchange Commission announced digital asset regulations in May 2022.
Earlier this year, the Commission announced that it was conducting a trial of digital exchange applications in order to increase market participation.
The Securities and Exchange agency is considering allowing tokenized coin offers on licensed digital exchanges that are backed by assets such as stock, debt, and property but “not crypto,” according to the head of securities and financial services at the Abuja-based agency, in an interview with Bloomberg.
“We always like to start, as a regulator, with a very simple clear proposal before we go into the complex ones,” he told reporters.
According to a September analysis by blockchain analytics firm Chainalysis, the number of crypto transactions in Nigeria increased by 9% year on year to $56.7 billion between July 2022 and June 2023.
