The Nigerian Securities and Exchange Commission (SEC) releases a clear statement for digital assets. The proposed set of cryptocurrency regulations has declared crypto assets as securities.
Statement by SEC
The statement over cryptocurrency regulation entitled “Statement On Digital Assets And Their Classification And Treatment” by the Securities and Exchange Commission of Nigeria introduces guidelines for those who are dealing with cryptocurrency.
The official release, published on September 14, set the purpose of cryptocurrency regulation in the given words:
“The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.”
But Nigerian SEC stated digital assets as securities, and sponsors or issuers will have to prove this status otherwise they will have to comply with the Commission. “Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing. However, where the finding of the Commission is that the virtual assets are indeed securities, then the issuer or sponsor must register the digital assets,” the report stated.
Foreign cryptocurrency firms will have to establish a local base in the country before starting any kind of business activity in the country. If an individual or a corporate registered with the Commission then all guidelines related to cryptocurrency will be subjected. According to SEC:
“Any person, (individual or corporate) whose activities involve any aspect of Blockchain-related and virtual digital asset services, must be registered by the Commission and as such, will be subject to the regulatory guidelines. Such services include, but are not limited to reception, transmission, and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian, or nominee services.”
The cryptocurrency trend in Nigeria is increasing due to many reasons such as poverty and unbanking situations. Google Trends also shows that Nigeria is a top country where Bitcoin’s interest is high. So, it was necessary to regulate cryptocurrency in the region.