Securities and Exchange Commission (SEC) has considered cryptocurrencies as digital assets and will, therefore, make it acceptable and put it under its strict regulations.
In a document released on Monday, SEC said its regulation will ensure that the use of digital assets is operated in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency.
The SEC explained that its decision to regulate the use of digital currency is not to hinder innovation in the country but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.
The agency said it was taking this action in line with Section 13 of the Investment and Securities Act, 2007, which confers powers on the commission as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria.
The regulator said it has adopted a three-pronged objective to regulate innovation that will safely deepen the market and provide solutions to problems. This will guide its strategy, its regulations and its interaction with innovators seeking legitimacy and relevance.
According to SEC, virtual crypto assets will be treated as securities and must be registered with the agency as digital assets but if the issuer believes his crypto assets are not securities, this has to be proven.
The apex capital market regulator stressed that “all Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token ICOs and other Blockchain-based offers of digital assets within Nigeria or by Nigerian issuers or sponsors or foreign issuers targeting Nigerian investors, shall be subject to the regulation of the commission.”
It further emphasised that “existing digital assets offerings prior to the implementation of the regulatory guidelines will have three months to either submit the initial assessment filing or documents for registration proper, as the case may be.”
The body noted that 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.