The Securities and Exchange Commission (SEC) has issued new regulations guiding the issuance, exchange, and custody of digital assets in the country. These regulations were contained in a document titled ‘New Rules on Issuance, Offering Platforms and Custody of Digital Assets’ where a digital asset is defined as a “digital token that represents assets such as a debt or equity claim on the issuer”.
The new regulations state that the commission would review applications within 30 days before a digital asset can be constituted as a “security” and that funds can only be raised within a limit of N10 billion.
The Commission said, “An issuer may only raise funds subject to the following limit: twenty times the Issuer’s shareholders’ funds i.e. the maximum quantum of funds permitted to be raised within any continuous 12 month period, subject to a ceiling of N10 billion or any other ceiling as the Commission may determine from time to time”.
SEC also stated that it would accommodate digital assets offering platform (DAOP); an electronic platform managed by a DAOP operator for offering digital assets.
Interested DAOP applicants are required to pay N100,000 as an application fee, a processing fee of N300,000, a registration fee of N30 million, and N100,00 for sponsored individuals.
According to the new regulation, “The commission may reject any application for registration of digital assets if, in its opinion, the proposed activity infringes public policy, is injurious to investors or violates any of the laws, rules, and regulations implemented by the commission”.
In 2021, The Central Bank of Nigeria (CBN) instructed financial service providers to stop transactions involving cryptocurrency; SEC however said: “there is no policy conflict between the capital market apex regulator and the CBN over the ban placed on cryptocurrency transactions in the banking industry”.
