U.S SEC backs away from Nigeria’s cryptocurrency over ban

In dealing with cryptocurrency trading, the United State’s Security and Exchange Commission (SEC) has stated that it will not go the way of Nigeria and China, as it feels the decentralised finance (DeFi) can be regulated.

Cryptocurrency trading has been banned in Nigeria since February 5, 2021, when the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, labeled the digital asset as a tool for criminal activities.

The CBN had a clampdown on digital investment startups aiding crypto trading, with a recent embargo placed on Riseinvest account for dealing in cryptocurrency.

China had also forbid citizens and companies from trading the unregulated digital currency, threatening jail term for any individual caught.

With the measures taken by Nigeria and China grabbing headlines, the U.S congress met with U.S SEC Chair Gary Gensler, on Tuesday, to enquire if the same will be replicated in the country.

Gensler doused speculations of such clampdown but said the cryptocurrency market needs to be regulated, as the digital asset is identified as securities even though they are decentralised.

Despite identifying the stablecoins as a risk to the economy, he told the lawmakers that the crypto market needs to register with the SEC, adding that despite its decentralized nature, the cryptocurrency exchanges still uses centralised protocols in its operation.

“Even decentralized platforms, known as DeFi platforms, employ a centralized protocol. Despite their different custody practices [compared to centralized exchanges], I think those are the best places to apply public policy.” Gensler told congress.