The Securities and Exchange Commission (SEC), Nigeria has said it will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions.
The apex regulator of the Nigerian capital market, said that any individual or corporate whose activities are blockchain-related and virtual digital assets must be registered with SEC and will be subject to the commission’s guidelines.
SEC, who regulates investments and securities business in Nigeria stated that virtual crypto assets are securities unless proven otherwise by the issuer or the sponsor.
The commission said it is essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency.
SEC added that the general objective of the 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.
This is according to the ‘statement on digital assets and their classification and treatment’ released by the Commission.
The statement read in part: “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.
“Issuers or sponsors (start-ups or existing corporations) of virtual digital assets shall be guided by the Commission’s regulation.
“The Commission may require Foreign or non-residential issuers or sponsors to establish a branch office within Nigeria. However foreign issuers or sponsors will be recognized by the Commission where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.
“For these purposes, the Commission has adopted the following with respect to virtual crypto assets: “Crypto Asset” means a digital representation of value that can be digitally traded and functions as (1) a medium of exchange; and/or (2) a unit of account; and/or (3) a store of value, but does not have legal tender status in any jurisdiction.
“A Crypto Asset is – neither issued nor guaranteed by any jurisdiction, and fulfills the above functions only by agreement within the community of users of the Crypto Asset; and Distinguished from Fiat Currency and E-money.”
Written by;
Ifunanya Ikueze
