- Nigerian regulators have recognized digital assets in the new statement
- The country’s SEC has declared virtual assets securities offering unless proven otherwise
- The regulator classified digital assets into four categories for regulatory oversight
Cryptocurrency News Today – The SEC (Securities and Exchange Commission) of Nigeria has defined digital assets officially under its regulatory structure. In what can be described as a stunning move, the regulator in a September 14 statement defined digital assets (tokens and coins) in Nigeria’s financial markets. The SEC remarked that these assets provide alternative investment opportunities. It went on to classify them into four categories for regulatory oversight. According to Nigeria’s SEC:
“Digital assets are securities offering unless proven otherwise. The burden of proof that the cryptocurrency proposed to be offered aren’t securities, hence, not under the SEC’s jurisdiction is for the issuer of said assets to decide.”
Nigerian Regulators Will Register and Give Approval for Cryptocurrency
Nigerian regulators will register and issue an approval for digital assets. Under the new framework, digital assets would be treated as cryptocurrencies. While utility tokens will be regarded as commodities. The SEC won’t be responsible for overseeing utility token transactions and spot trading. The regulatory body would regard security tokens as securities. The SEC would regard investment funds and derivatives as “specified investments. The regulator stated that:
“The objective of regulation is to create standards that facilitate ethical practices for a fair and efficient market.”
Firms releasing DATOs (Digital Assets Token Offerings), ICOs (Initial Coin Offerings), and STOs (Security Token Offerings) in Nigeria before the new regulations were implemented of these will have a period of three months to register with the commission.
Nigerian’s Have Strong Interest in Digital Assets
Interest in the digital asset from Nigerian’s may have driven regulators to quickly initiate oversight in the crypto market. According to data given by Google Trends, Nigeria consistently ranks number one around the globe in searches for “Bitcoin” online (which is over twice the traffic of that of Ghana and South Africa). According to Chainalysis, the Blockchain analytics firm, Nigeria, South Africa, and Kenya are leading the continent in crypto transfers monthly. As of June 2020, the figure stood at $316 million.
At press time, Nigeria is one of the largest sources of the overall Bitcoin trading volume in Africa. As of April 2020, Nigeria makes up one of eight countries in Africa to host a Bitcoin ATM. According to a July report about digital assets in Africa, the CEO of Yellow Card a Nigeria-based exchange, Chris Maurice, said:
“When it comes to crypto, things are growing rapidly across Africa particularly in Nigeria, South Africa, Kenya, and Ghana. At this point, it is only a matter of time before the concept spreads across the rest of Africa.”