The securities and exchange commission of Nigeria has dignified digital assets as securities and has given it a regulatory stance.
“Virtual crypto assets are securities unless proven otherwise,” said the Nigerian SEC.
The commission believes that these virtual crypto assets are treated as alternative investment properties. Regulatory Authorities will be classifying them in 4 different categories.
The commission will be dividing these virtual currencies as Crypto-assets like non-fiat virtual currency, Utility Tokens, or Non-Security Tokens, Security Tokens (e.g., virtual tokens that have the features of security), Derivatives, and Collective Investment Funds.
“The burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC is placed on the issuer or sponsor of the said assets.”
The Nigerian regulatory Authorities have denied on overseeing utility tokens as they are not mineable and are based on third party blockchain. However, they will be overseeing security tokens as securities and derivatives and investment funds as “Specified Investments”.
General Consensus Vs Reality
People’s general opinion of this revolutionary advancement holds a rather uncanny bearing.
“I don’t think the ramifications of this are that big. How many crypto projects can you name that have come out of Nigeria?” says a user on Reddit
This statement may stand false as data from google trends suggest that Nigeria remains first worldwide in the amount of “Bitcoin” searches. Also Nigeria, South Africa, and Kenya lead in monthly crypto transfers. Nigeria is one of the biggest sources of BTC(Bitcoin) trading volume in Africa and one of the only eight on the continent to have a Bitcoin ATM.
Maybe there is much more to see from Nigeria when it comes to context with cryptocurrency regulations. The cryptocurrencies industry is a newcomer and every regulatory authority is trying to give it a framework.
The Nigerian government has taken a bold step when compared to other countries which may further their social and economical factors.