Currently in Nigeria, Crypto has been deemed “securities” by the SEC. It appears that SEC is actively working on bringing the digital asset within its control, this way they will be able to regulate the accompanying crypto market. SEC has iterated that they, controlling the crypto market is not incompatible with the 2007 Investment and Securities legislation. Here is the new position as elucidated in a statement released on the 14th of September.
Corporate Bodies and Private Individuals To Register With SEC
The government agency commanded corporate bodies private and individuals “whose activities involve any aspect of blockchain-related and virtual digital asset services, (to) be registered.”
The statement directed that “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.”
Foreign Participation Requires Incorporation in Nigeria
For foreign participants, the position of the Companies and Allied Matters Act directing that they “ establish a branch office within Nigeria.” must be followed.
To this end, Senator Iyere Ihenyen, the General Secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), applauded SEC for deeming “… digital assets as alternative investment opportunities.”
He explained that what this means is that “investment or security-based digital assets offerings are caught here, whether it is the now dead or dying initial coin offerings (ICOs) that got many fingers burnt in 2017 or the security token offering (STO) that didn’t live up to expectations.”
Nevertheless, Ihenyen expressed that SEC “should have clearly defined its test for what constitutes investment or security, rather than vaguely state that virtual crypto assets are securities unless proven otherwise.” He didn’t save his reservations about this most recent SEC move. He emphasized that:
“The approach the SEC has taken may be problematic, not only for players and investors in the Nigerian market but also for everyone, including the courts and the regulator itself. More so, the burden of proving otherwise is placed on the issuer, a thing that could be easily abused by regulators and even law enforcement agencies.”
For SEC, are Cryptocurrencies Legal Now?
Another Crypto proponent, Chiagozie Iwu, Naijacrypto’s CEO, says the SEC’s classification of crypto assets insinuates that the agency recognizes digital assets, although he is not convinced that the statement touched on whether cryptocurrencies are legal or illegal. Iwu pointed out that SEC is yet to even recognize Crypto exchanges as actual markets. He remains positive for a more encompassing statement from the agency.