Cryptocurrencies are coming under the lawful gaze of authorities in Nigeria after a long time of legal transparency. The Nigerian securities market supervisor – the Securities and Exchange Commission of Nigeria (SEC) is releasing new rules that will place limits on crypto interactions. SEC states that all cryptocurrencies were securities, in an official statement.
First and foremost, the regulator defined all digital coins as a “token that represents assets such as a debt or equity claim on the issuer.” Next, it aimed to clarify under what pretext crypto assets can be issued in the country, as well as the legal frameworks under which these assets will fall into.
The 54 page long rule book reveals some pretty standard requirements that all firms dealing with cryptocurrencies:
- the firms need to be registered and licensed with the market regulator.
- the companies are mandated to file reports on digital asset details, risk and disaster management plans, and KYC policies.
- security protocols must also be provided
- the platform’s architecture and supporting tech must be disclosed with the regulator
- minimum paid-up capital of 500 000 NGN (some $1204) must be kept at all times
- crypto platforms need to obtain a “no objection” letter from the regulator
- SEC also sets limits on the investment amounts for retail users: 200 000 NGN per issue and no more than 2 million NGN within 12 months
Nigerian crypto interest has risen in the last decade, reaching an unprecedented level. The largest African economy has set some ground rules for crypto players and issuers in the midst of a local and global boom.