The Nigerian SEC defines digital asset as a token that represents assets such as a debt or equity claim on the issuer. The SEC has announced rules that govern digital assets as securities.
The “New Rules on Issuance, Offering Platforms and Custody of Digital Assets” circular gives clarity on all facets of the crypto industry.
The circular clarifies rules for
- Issuance of Digital Assets as Securities
- Registration Requirements for Digital Assets Offering Platforms (DAOPs)
- Registration Requirements for Digital Asset Custodians (DACs)
- Virtual Assets Service Providers (VASPs)
- Digital Assets Exchange (DAX)
Some of the new rules are:
Any entity looking to offer crypto services and products within Nigeria or to Nigerians must secure a VASP licence, in addition to relevant category licences. VASPs must also compulsorily use anti-money laundering and combating the financing of terrorism (AML/CFT) standards.
Any proposed token can be listed as a security only if the Commission grants its approval. The token has to follow the country’s securities laws. Token projects will be allowed to raise 10 billion Naira, an amount which can be updated by the Commission.
DAOP operators must conduct due diligence on any project which wants to offer digital assets through the platform. The DAOP can provide its own custody services, given that they comply with the necessary regulations. No specific requirements have been stated for storage of custody digital assets.
All DAX’s will have to obtain a permit, which gives the Commision complete access to its records. Exchanges are required to submit applications for every asset they tend to list. Moreover, an exchange can only trade a digital asset which has obtained a ‘no objection’ certificate from the SEC.
Exchanges which are registered in Nigeria need to be backed by 500,000 Naira in paid-up capital, and post a fidelity bond for at least 25% of this amount.
These new regulations will allow the country to move towards greater and safer crypto adoption. Nigeria has also already published its CBDC, eNaira which will now offer the option of bill payment after the latest upgrade.