Nigeria SEC Introduces New Digital Assets Regulations – In an effort to protect Nigerian investors, the Securities and Exchange Commission (SEC) has developed a new set of regulations to oversee digital asset trading.
Digital assets, sometimes known as cryptocurrencies, will be regarded as securities regulated by the commission under the new legislation.
Last year, Nigeria’s central bank prohibited financial service providers from enabling crypto-related transactions, a move that sparked outrage among the country’s primarily young populace. The country’s Securities and Exchange Commission, on the other hand, has indicated that it is inclined to regulate rather than abolish the business.
With the implementation of this new rule, the country’s crypto business may finally gain the regulatory clarity it needs on what defines a digital asset or security.
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Nigeria’s Digital Asset Rules
A virtual asset service provider (VASP) license is required for individuals or businesses interested in operating as virtual asset service providers. Apart from that, projects wishing to undertake initial coin offerings (ICOs) aimed at Nigerians must register with the commission, and they are not permitted to raise more than 10 billion naira ($24 million).
The commission would have 30 days to assess applications before deciding whether the digital asset is a “security,” according to the regulator’s document.
In addition, the new rules permit a digital assets offering platform (DAOP) to provide custodial services. The DAOP, on the other hand, must conduct due diligence on any project that is featured on its website.
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Nigerians are among the world’s most enthusiastic cryptocurrency users. According to a recent CoinMarketCap analysis, the country’s high inflation rate is pushing crypto adoption as citizens embrace digital assets like USDT and others to keep their naira from dropping.
In addition, the country’s central bank recently updated the CBDC’s capabilities to assist bill payment in an effort to encourage usage.