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SEC Nigeria Releases Statement on Cryptocurrency, Defines “Crypto Assets” as Securities



  • Virtual Crypto Assets are Securities, unless proven otherwise
  • 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.
  • Crypto Assets are does not have legal tender status in any jurisdiction
  • SEC to regulate crypto-coin or crypto-token investments when the character of the investment qualifies as securities transaction
  • Crypto based crowd funding to be under the purview of the Securities and Exchange Commission.

The Securities and Exchange Commission of Nigeria has released a statement on cryptocurrencies which gives a definition to crypto assets and regulations.

The statement was dated 11th September, 2020 and it seeks to give a direction and the Regulator’s position on Cryptocurrency. According to the statement, the SEC defined Crypto Assets as “a digital representation of value that can be digitally traded and function as (1) a medium of exchange; and /or (2) a unit of account; and/or (3) a store of value, but does not have a legal tender status in any jurisdiction.”

Section 13th of the Investment and Securities Act, 2007 authorized the Commission to legally be the apex regulator of the Nigerian Capital Market and to regulate investment and securities business in the country. The SEC with these powers has adopted what it called a three-pronged objective to regulate innovations in the local cryptocurrency industry. These objectives are safety, market deepening and provision of solutions to problems.

The SEC believes this will guide its strategy, regulations and interactions with innovators that are seeking legitimacy and relevance. The regulator said it will regulate crypto-coin or crypto-token investments when the character of the investment qualifies as securities transaction.

Registration of Crypto Assets – Security or not a Security?

According to the statement from SEC, the position of the commission is that virtual crypto assets are securities, unless proven otherwise and that the burden of proof is on the issuer/sponsor. To this end, issuers/sponsors are expected to make an initial assessment filing in order to prove their crypto assets are not securities.  However, when the Commission is satisfied an offering is a security, issuers or sponsors of such offerings are expected to register the crypto asset with the Commission.

The regulator went further saying

“All 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 Nigeria investors, shall be subject to the regulation of the Commission.” 

sec, nigeria

And all existing digital assets offerings prior to the implementation of the Regulatory Guidelines will have three months to submit their initial assessment filing or documents for registration.

This places all crypto based crowdfunding under the scrutiny of the apex securities regulator.

Who the Nigerian Securities and Exchange Commission will regulate?

The regulator aims to capture under its regulatory might everyone dealing on cryptocurrency in the country both individuals and corporate entities. This include any person whose activities involved any aspect of virtual currencies and blockchain-related businesses. The SEC said

“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.”

SEC, Nigeria

From the scope contained in the statement by the regulator, it seeks to bring under its umbrella everyone involved in digital assets transactions include foreign organizations

The Commission may require Foreign or non-residential issuers or sponsors to establish a branch office within Nigeria. However foreign issuers or sponsors will be recognized by the Commission where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.”

SEC, NIgeria

The SEC furthermore said of foreign issuers/sponsors that a recognition status will be accorded where the issuer/sponsor is from a member country of the International Organization of Securities Commissionn (IOSCO)

SEC Classifies/Categorizes Virtual Assets

The Apex commission of the capital market in Nigeria categorized virtual digital assets into three categories. Crypto Assets which are non-fiat virtual currency, utility tokens or non-security tokens and security tokens and derivatives and collective investment funds of crypto assets, security tokens and utility tokens.

These various categories of virtual assets behave differently. According to the SEC, Crypto Assets being the first category will be treated as commodities if they are traded on Recognized Investment Exchange and/or issued as investment. It is subject to Part E of the SEC Rules and Regulations and any other relevant sections and subsequent Rules which will be enacted in future.

The second category Utility Token or Non-Security token are cryptocurrencies which are simply used to provide users with a product and/or service.  Thirdly are Security Tokens which are virtual tokens that have the characteristics of a security. This type of tokens represents values similar to equities and bonds etc.  And lastly, derivatives and collective investment funds of crypto assets, security tokens and utility tokens.


Nigeria is showing signs of readiness to implement blockchain – Lucky Uwakwe



The Nigerian state is showing signs of readiness for blockchain integration across the nation. This was made known by the Chief Operating Officer of Sabi Exchange, Lucky Uwakwe at the Inside Blockchain show on CryptoTvplus on monday the 23rd of November, 2020.

He went further saying the Private sector is ready, while the public sector shows signs of readiness, this is reflected in the moves by government bodies especially NITDA in recent times. 

Inside blockchain CryptoTVPlus

Speaking on the topic of Nigeria generating between $6bn to $10bn from now till 2030, Mr. Luck said it’s possible and that more than that can really be captured by the government over the ten year period if the policies and frameworks are well put in place. 

He compared Nigeria to Malta emphasizing the growth over the few years in terms of blockchain policy, regulations & infrastructures and that if Nigeria can do what Malta has done, it can easily generate the amount it wishes to generate. 

Mr. Lucky was pressed further by the CryptoTvplus host, Tony Obiajuru on what steps had been taken since the stakeholders meeting in Abuja earlier to pursue the agenda of the meeting, Mr. Lucky said the industry stakeholders are currently submitting contributions to support a comprehensive policy. Basically, the current phase is still the adoption phase – phase one. 

He also commented on the cryptocurrency market on the program. He said the market is currently into four segments which are the BTC, ALTs, DeFi and NFT. 

You can watch the program here before:

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Hong Kong’s SFC To Oversee All Crypto Exchanges



Like many nations, The Government of Hongkong’s is set to take advantage of Blockchain technology and its many financial products. This time it appears that the government is after changing the regulations for firms that operate Crypto Exchanges in the Hong Kong terrain.

The director of Licensing at Hong Kong’s Securities and Futures Commission (SFC), Clara Chiu, will present a consultation paper in her Keynote Speech at the Hong Kong FinTech Week 2020 in the coming Tuesday. She is to recommend that the SFC be granted increased surveillance authority over all “centralized virtual asset trading platforms” in Hong Kong. Irrespective of whether the Virtual Asset Exchange enables the trading of tokens deemed securities or strictly crypto like bitcoin (BTC, +1.50%), the SFC is projected to exercise oversight powers and functions over them.

The Hong Kong government agency curated the regulatory guidance in 2019 and the soft law  classifies virtual asset firms dealing in (even if it is) one security as  being in the same category as securities brokerages, thereby subjecting them to the same rules. In this light, these firms will be mandated to sign up with the SFC.

Ashley Alder, the CEO of the SFC related on Tuesday that;

“Under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security,” 

At this rate, all Crypto Exchanges will have to apply for an SFC Permit or License under Hong Kong’s anti-money laundering law. This is the proposed guideline from the Financial Action Task Force (FATF).

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Iran Modifies Digital Law to Allow the Use of Crypto for Import Funding



As reported by Iran Daily, the Islamic Republic News Agency (IRNA) recounted earlier this week that the Irani Legislative cabinet has altered its current law on digital assets to allow the Central Bank of Iran (CBI) to use crypto for import funding. Upon careful observations, both the CBI and the Cabinet had earlier made recommendations for this alteration to be made. 

Essence of the Alteration

Essentially, this modification has opened Iran to an era where legally mined crypto in Iran can only be traded when it is being used to finance importations from other countries of the world. 

Crypto Miners to Present the Crypto to CBI 

IRNA also highlighted that miners of crypto in Iran will present the crypto to the CBI within an officially approved cap. It behoves on Iran’s Ministry of Energy to publish instructions on the permitted volume of subsidized energy that a crypto miner can use. The lawful limit of crypto mined which will be allowed to be delivered to the CBI will be based on the volume of subsidized energy a miner uses. Because Iran is burdened by a number of U.S. sanctions and is just recovering from the Coronavirus Pandemic like many other nations, it is turning to Crypto to alleviate its many economic woes.

Although the Irani government authorized the mining of crypto in its territory, it has since burdened the sector with stringent regulations, thereby laying a yoke on many Blockchainpreneurs in the space. 

Iran Daily Says Using BTC for Import Payments Will Help Iran Circumvent US Sanctions

This move by the Irani Cabinet is perceived to be a smart one as the Iran Daily recently hinted that using  bitcoin (BTC, +1.39%) for import payments will help Iran get around penalties that restrict the nation from gaining access to the US Dollar. 

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