In recent times, Nigeria has been among the leading countries for crypto adoption globally. In Q1 2020, Nigerian youth led the rest of the world in crypto adoption, and according to a report by Chainalysis, Nigeria was eight overall in crypto adoption in Q2 2020.
This rapid adoption and apparent absence of a definite regulation has seen the entry of several crypto-based startups into the Nigerian market. All looking to grab a share of the spoils from Africa’s most populous nation.
The introduction of specific guidelines for the crypto space becomes relevant in order to improve safety for crypto users in Nigeria.
Techpoint Africa reports, The Securities and Exchange Commission (SEC) in Nigeria has issued regulatory guidelines for digital currencies and crypto-based companies or startups. The aim, according to Nigeria’s capital market and investment regulator, is to protect investors and create standards for ethical practices.
Also, the Commission will regulate all Digital Assets Token Offerings (DATO), Initial Coin Offerings, Security Token ICOs , and other Blockchain-based offers within Nigeria by Nigerian issuers or by foreign issuers targeting Nigerian investors.
According to a statement released, September 14, 2020, the SEC will be taking a three-pronged approach to regulate innovation in the crypto sector; these are: safety, market deepening, and providing solutions to problems.
The Commission states that it will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions.
Every crypto asset in Nigeria will be treated as securities, unless the company or startup proves otherwise. If the SEC determines that a digital asset is not a security, it will not regulate it.
Source: https://techpoint.africa/2020/09/14/sec-nigeria-regulations-cryptocurrency/