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Nigeria: SEC Begins Regulation of Crypto-Currency Assets to Protect Investors

by telegramnews
Nigeria: SEC Begins Regulation of Crypto-Currency Assets to Protect Investors

Nigeria’s Securities and Exchange Commission (SEC) has said it will begin regulating trade in crypto assets to protect investors and ensure market integrity and transparency.

SEC said in statement that digital assets offerings provide alternative investment opportunities for the investing public, noting that it is therefore essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency.

It explained that the general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.

“The position of the commission is that virtual crypto assets are securities, unless proven otherwise. Thus, 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,” it said.

SEC said Section 13 of the Investment and Securities Act, 2007 conferred powers on it as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria.

“In line with these powers, the SEC has adopted a three-pronged objective to regulate innovation, hinged on safety, market deepening and providing solution to problems. This will guide its strategy, its regulations and its interaction with innovators seeking legitimacy and relevance. Consequently, the SEC will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions”.

The commission explained that issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing.