The digital assets trading market in Nigeria is no longer confined to a select few. With the number of Nigerians actively trading in cryptos increasing, the country now has over 20 crypto exchanges to choose from. However, with over 200 substandard traders currently operating as Virtual Assets Service Providers (VASPs) and Unlicensed Digital Asset Operators (DAOPs), there’s still an urgent need for new regulations that can help protect the interests of individual investors.
Nigerian SEC Announces New Rules Governing Issuance The Nigerian Security and Exchange Commission (SEC) has announced new rules governing the issuance of digital assets in Nigeria. The SEC also released a document detailing what is expected of anyone looking to set up their own digital exchange for the trading of digital tokens.
Read on to find out more about the new SEC rules governing issuance of digital assets in Nigeria…
A new set of rules governing the issuance of digital assets has been announced by Nigeria’s securities regulator. Platforms that issue digital assets are also required to register.
Initial Assessment Filing
New rules have been announced by the Nigerian Securities and Exchange Commission (SEC) for the issuance of digital assets as securities. There are also rules about registering digital assets offering platforms (DAOPs). A new set of rules that were recently released by the commission covers virtual asset service providers (VASPs) and digital asset exchanges.
As part of the new regulations, individuals or entities that wish to raise funds through the sale of tokens or coin offerings must submit an assessment form and a draft white paper. In the draft white paper, the commission states that entities seeking permission to operate must submit “complete and current information about the project, business plan and feasibility study.”
Additionally, the draft document should describe in brief the initial digital asset offering, its value, and the advantages it provides. In addition, the SEC said there must be a description of how the funds will be used.
White Paper Disclaimer
The commission said whitepapers for initial digital asset offering projects should contain a disclaimer that the document does not represent an offer to sell. Following the filing of the required documentation, the SEC will review it and make a determination.
In determining whether the proposed digital asset is a security, the Commission shall review same within 30 days from receipt.
In addition to describing the steps prospective issuers of digital currencies need to take, the commission also lists requirements and limitations. New rules require applicants seeking to register as DAOPs to pay $241 for filing fees, $724 for processing fees, and $72,430 for registration fees.
In its 54-page new rules document, the commission says DAOPs must maintain a list of initial token holders that receive their virtual assets/digital tokens during the offer period and enter them into that list. When it comes to using another platform as a host, the SEC says an issuer cannot be hosted on more than one DAOP or an equity crowdfunding platform at the same time.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
