The Nigerian Securities Exchange Commission has published new rules regarding the issuance, clearing and custody of digital assets in the country.
The Nigerian Securities Exchange Commission has issued a statement over the past years on how it will classify and treat digital assets. Now, the Commission is issuing new rules for cryptoassets.
It was stated that this development could bring legitimacy to crypto and related businesses and open new doors for the use of crypto in Nigeria, one of the leading countries in crypto adoption.
Nigeria’s New Crypto Rules
The Central Bank of Nigeria (CBN) has published new rules in line with the rules published by the SEC regarding digital assets.
In Nigeria, organizations wishing to offer any type of crypto products and services to Nigerians must obtain a virtual asset service provider (VASP) license.
The VASP license comes with its own obligations. In particular, while the licensees receive risk notification forms declared by themselves from the users, they issue a disclaimer stating that the losses arising from investments are not covered by any hedge fund.
In addition to the VASP rules, the document released by the Commission on 13 May covers the following areas:
- Running a digital asset exchange
- Token issuance
- Digital asset platform business
- Requirements for digital asset custodians
About Operating a Digital Asset Exchange
Under the SEC’s rules, all crypto exchanges serving Nigerians now need permission, which gives them access to the Commission’s records. Exchanges are expected to provide weekly and monthly trading information, as well as quarterly and annual financial and compliance reports.
An exchange will also need to submit an application for each asset it wishes to list. The application must prove that the exchange has sufficient knowledge of the project and the risks involved. Moreover, exchanges are also required to perform real-time market surveillance.
About Token Issuance
Those wishing to make digital asset offerings in Nigeria, or any project targeting Nigerians, must register their intention with the SEC by completing an evaluation form and submitting a detailed copy of its whitepaper. If the commission accepts the proposed token as a security, it must comply with the securities laws of the issuing country.
Additionally, the SEC will allow projects to rise up to NGN 10 billion, which is about $24.1 million at the official exchange rate. The Commission may update this figure as it deems appropriate.
About Operating the Digital Asset Platform
Digital asset offering platform (DAOP) refers to portals where issuers can initiate a digital asset offering, such as an ICO. The Commission has drawn up a list of obligations for the operation of a DAOP.
About Digital Asset Storage
There are also provisions for running a digital asset custody business in Nigeria, According to the Rules, a DAOP can provide its own custody services provided it complies with the relevant regulations.
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.