SEC releases rules to permit crypto trading in Nigeria

The Securities and Exchange Commission (SEC) has issued a body of rules and regulations that will guide issuance and transactions of digital assets such as cryptocurrency and Non-Fungible Tokens (NFT) in Nigeria.

The 54-page document titled: ‘Proposed Rules on Issuance, Offering Platform and Custody of Digital Assets’ is in addition to any requirements provided for under securities laws or any other rules issued by the Commission.

This may have been an important step toward legalisation of crypto trading in Nigeria as you would recall that the Central Bank of Nigeria’s last year banned banks and financial institutions from dealing in or facilitating transactions in digital currencies.

But the country’s young, tech-savvy population has eagerly adopted cryptocurrencies, for example using peer-to-peer trading offered by crypto exchanges to avoid the financial sector ban.

The new regulatory document launched by the SEC lays out registration requirements for digital assets offerings and custodians, and classifies the assets as securities regulated by the SEC.

The SEC said no digital assets exchange would be allowed to facilitate trading of assets unless it had received a “no objection” ruling from the commission.

A digital assets exchange will be required to pay N30 million naira ($72,289) as a registration fee, among other fees.

In October, Nigeria launched a digital currency, the eNaira, in the hope of expanding access to banking.

Official digital currencies, unlike cryptocurrencies such as bitcoin, are backed and controlled by the central bank.