The Nigerian Security and Exchange Commission has branded cryptocurrencies as securities in a landmark document that will change the way crypto assets are regulated in the African nation.
The document released today highlighted several aspects of cryptocurrency services that will be regulated by the regulatory body.
According to the document the SEC would regulate crypto tokens and investments that qualify as securities transaction.
Furthermore the Commision of the opinion that all crypto assets are securities until proven otherwise and issuers of cryptocurrencies must provide evidence to the regulatory body regarding their cryptoassets.
SEC to regulate ICOs and Digital assets within Nigerian
The SEC also explained that it had been empowered to regulate all Initial Coin Offerings (ICOs), Digital Asset Token Offering (DATO), Security Token ICOs and blockchain based offers within Nigeria.
Also all existing digital asset offering platform have been given three months to submit the initial asset filing and documents.
The regulation also extends to individual traders who are involved in blockchain related and digital assets services. Moving on traders are expected to be registered with the SEC and face regulation on their transactions like other securities (stocks and bonds)
The Regulatory body also explained crypto assets as a digital representation of a value that can be used as a medium of exchange, a unit of account or a store of value that does not have legal tender status in any Juridiction.
Cryptocurrencies Legal in Nigeria
This ruling by the SEC ends months of speculations regarding the status of cryptocurrencies in Africa most populous Nation. Nigeria has the highest number of crypto users in Africa with p2p transactions exploding since the turn of 2020.
This has led to the development and rise in both local and foreign exchange platforms offering digital trading services. With this ruling, all crypto platforms would be required by law to register with the SEC for regulation and it is expected that they would be taxed accordingly.
Furthermore, this could be the beginning of concrete steps towards developing a digital Naira with the local currency having been plagued by inflation in recent years.