Last updated on January 16th, 2021 at 08:51 am
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Cryptocurrency/ Bitcoin is now officially legal in Nigeria following the SEC Nigeria new regulations on Cryptocurrency.
SEC Nigeria released a press release stating that the commission will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions.
This clarifies that Cryptocurrency/ Bitcoin is now officially legal/recognized in Nigeria.
Statement on Digital Assets, their classification and treatment https://t.co/YImoKToIhU
— SEC Nigeria (@SECNigeria) September 14, 2020
The commission states that virtual crypto assets are securities, unless proven otherwise. It is therefore left for the sponsor or issuer to prove that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the commission.
“Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing. However, 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.”
The commission defines “Crypto Asset” as a digital representation of value that can be digitally traded and functions as the following:
- A medium of exchange;
- And/Or a unit of account;
- And/Or a store of value, but does not have legal tender status in any jurisdiction.
Will Crypto Traders Be Registered and Regulated?
The commission also noted that any individual (crypto trader) or corporate body involved in any blockchain related service or virtual digital assets is subject to regulations and must register with the commission. Since cryptocurrency/ Bitcoin is officially legal/recognized in Nigeria.
“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. Such services include, but are not limited to reception, transmission and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian or nominee services.”
For Cryptocurrency Operators (companies).
SEC Nigeria notes that Cryptocurrency Operators (companies) who have in the future offered any 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.
The commission notes that these existing digital offerings will have only three (3) months to either submit the initial assessment filling or documents for proper registration as the case maybe.
“Existing digital assets offerings prior to the implementation of the Regulatory Guidelines will have three (3) months to either submit the initial assessment filing or documents for registration proper, as the case may be.”
Here begins the new dawn for Cryptocurrency/ Bitcoin in Nigeria. Bitcoin is officially legal/recognized in Nigeria.
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Tony Chimdiuto