Nigeria equates cryptocurrencies with securities
The Securities and Exchange Commission of Nigeria (SEC) has published new rules regulating cryptocurrencies, classifying them as securities.
According to the 54-page document, digital assets are the equivalent of a share or debt claim of an issuer.
The rules also include registration requirements for trading platforms. In particular, exchanges must have a minimum paid-up capital of 500,000,000 naira ($1.2 million at the time of writing the news).
Registered platforms must provide the regulator with a list of assets and get approval for each. The SEC is asking exchanges to adhere to a “fair, reasonable and transparent” commission policy.
In 2020, the SEC recognized crypto-assets as securities with the proviso “unless proven otherwise”. Thus, the Commission left it up to issuers to prove that an asset does not fall under its jurisdiction.
Luno exchange regional manager Owen Odia said in a commentary to Bloomberg that the new rules could act “as a harbinger of a surprise move by the central bank to change its approach, creating a critical framework for the mass adoption of cryptocurrencies across the country”.
Last year was a record year for the average number of monthly crypto transactions in Africa, up 1,386.7%, according to KuCoin analysts' estimates.
In August 2021, The Guardian reported on the growing popularity of cryptocurrencies in Nigeria, despite prohibitive measures from the authorities.
In February 2021, the Central Bank of Nigeria banned commercial financial institutions from providing services to cryptocurrency exchanges and digital asset companies.
The Senate later suggested the central bank should regulate the industry rather than restrict it.
In March 2022, the regulator said it did not ban locals from buying and selling bitcoin, and the restrictions only affected financial institutions. Against this backdrop, p2p transactions in the country increased by 27 per cent.