Cryptocurrencies have been around for more than a decade now and regulators are slowly making moves to recognize this new asset class. The latest to open up about cryptocurrencies is the Securities and Exchange Commission of Nigeria, which has now officially defined digital assets as ‘securities’ in a recent statement.
According to the release published on September 14, the Nigerian Securities and Exchange Commission, or SEC, has now defined tokens and coins available in the nation’s financial markets and added that these assets which provide “alternative investment opportunities” will now be classified in four categories for regulatory oversight.
The SEC’s statement said:
“Virtual crypto assets are securities unless proven otherwise. The burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC, is placed on the issuer or sponsor of the said assets.”
Regulators in Nigeria will be registering and approving all digital assets from here on, and cryptocurrencies and utility tokens will be treated as commodities.
While the SEC mentioned that it won’t be overseeing the utility token spot trading and transactions, it noted that it will be viewing security tokens as securities, and derivatives and investment funds as “specified investments.”
“The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market,” the release added.
Any blockchain and cryptocurrency company set to release Digital Assets Token Offerings, or DATOs, Initial Coin Offerings, or ICOs, and Security Token Offerings, or STOs, in Nigeria before the implementation of these new regulations will have three months to register with the SEC.
The Nigerian government hasn’t been too optimistic about crypto so far, and the latest announcement diverts from the nation’s earlier sentiments.
Meanwhile, the demand for cryptocurrencies in the nation continues to rise as a result of the failing economy.
Nigeria is also one of the biggest sources of Bitcoin trading volume in Africa and one of eight on the continent to host a Bitcoin ATM, as of April.