Cryptocurrencies appear to have found substantial assistance and shelter in poor and economically oppressed countries, as opposed to developed countries. Venezuela, a country whose economy has collapsed, has made news in the crypto-verse, particularly in view of its wide crypto-acceptance rate. Nigeria appears to be following suit as the country’s regulator has revealed support for digital assets.
Cryptocurrencies Fall Under The Purview Of Nigerian SEC
The Nigerian Securities and Exchange Commission (SEC) shared a declaration entitled ‘Statement on Digital Assets and their Classification and Treatment’ highlighting the status of cryptocurrencies in the country. While it was made clear that the regulatory body had no intention of hindering innovation, the importance of engaging in ethical practices for an effective market was set out in the statement. The SEC has revealed that digital assets would be regulated by keeping in mind the safety, deepening of the market and the production of solutions for quandaries.
While the developers of several cryptocurrencies have tried to prove that cryptocurrencies cannot be classified as securities, the Nigerian SEC has strongly argued that ‘virtual crypto assets are securities, unless otherwise proven.’ However, the Commission has given individuals the opportunity to demonstrate how their assets are not securities. Detailed SEC,
“[…]where the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.”
In addition, the registration process was also mentioned in the declaration where the initial assessment of the evidence followed by ‘filing for proper registration, either directly by the issuer or the sponsor, or where the burden of proof is not satisfied.’
The Commission noted that any platform or person involved in cryptocurrency or blockchain-related activities would fall within the competence of the SEC. This also included Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token ICOs.
Additionally, as for foreign issuers, the SEC mandated the establishment of a branch office in the country. The statement detailed,
“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.”