On September 14, SEC defined tokens and coins as part of the financial market and therefore subject to regulatory approval and oversight.
They are considered alternative investment opportunities and will be split across four categories based on how much regulatory oversight they need.
Commenting on the decision, SEC had this to say:
“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.”
Now, though, Nigerian regulators will keep a closer eye on the cryptocurrencies and utility tokens and treat them as commodities. Security tokens, on the other hand, would be treated as securities and derivatives. Investment funds will be considered “specified investments.”
Regulating the crypto market a little better is definitely an upside yet it may take some getting used to. Nigeria has urged companies releasing DATOs and ICOs to make sure they are registered with SEC.
All companies will have a three-month grace month after which they would be considered as operating outside of the country’s jurisdiction and therefore liable for penalties. Nigeria is also ranking first worldwide for searches such as “Bitcoin,” according to Google Trends, a tool used to measure online traffic.
Many blockchain companies are already operating out of Nigeria, including Quanta, which hired Frank Schuengel to serve as the COO for the company in the country. Meanwhile, many operators remain accessible for Nigerian players.