Nigerian Regulator Defines Crypto as Securities, Clarifies Listing Rules

The Nigerian securities market supervisor published a new set of rules recently, clarifying that digital assets come under its purview. The regulator defined digital assets as “a digital token that represents assets such as a debt or equity claim on the issuer.”

The new rules of the Securities and Exchange Commission (SEC) of Nigeria clarified the issuance of digital assets in the country, along with regulations on the offerings and custodian platforms.

“These rules shall apply to all issuers seeking to raise capital through digital asset offerings,” the SEC stated.

According to the 54-page-long rule book, the exchanges need to register with the market regulator and furnish information like details of listed digital assets, risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term plans including know-your-customer and disaster management. In addition, they need to provide details on security protocols, including the platform’s architecture and technology and escrow agreement with the custodian.

Further, the Nigerian crypto exchanges need to ensure that they have all the licenses and permits for the issuance and transfer of securities.

Moreover, the rules mandate the exchanges to have a minimum paid-up capital of NGN 500,000 (around $1,204) and a fidelity bond for at least 25 percent.

Strict Listing Rules

Additionally, these platforms need to obtain a 'no objection' letter from the Nigerian securities market regulator to list new digital assets.

Also, the Nigerian SEC clarified limits on the investment in initial digital asset offerings. While there is no restriction for such investments on institutional and high net worth investors, retail investors can only invest a maximum of NGN 200,000 per issuer with a total investment limit of NGN 2 million within a 12-month period.

Nigeria is the largest economy in Africa. The rules around digital assets came when the country is seeing a mass interest in cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term like most of the other countries in the region.