Sec is proposing new law for blockchain and investments regulations of crypto currencies.
The Securities and Exchange Commission (SEC), has proposed a new bill targeted at regulating Crypto-token or Crypto-coin investments when the character of the investments qualifies as securities transactions, OnyxNews Nigeria reports quoting Nairametric.
The Commission’s position 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.
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.
However, where the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.
The registration process for virtual assets will involve a two-pronged approach – an initial assessment filing to satisfy the burden of proof, and a proper filing for registration, either made directly by the issuer or sponsor, where the burden of proof is not satisfied.
At the same vein, all Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token (ICOs), and other Blockchain-based offers of digital assets within Nigeria, or by Nigerian issuers, sponsors, or foreign issuers targeting Nigerian investors, shall be subject to the regulation of the Commission. Existing digital assets offerings prior to the implementation of the regulatory guidelines will have three (3) months to submit the initial assessment filing of documents for registration proper, as the case may be.
Speaking, in an exclusive interview with Nairametrics, founder, Blockchain Nigeria User Group, Chimezie Chuta with excitement discussed on the long-overdue legal framework by the Nigerian Securities Exchange Commission regulating digital assets and blockchain investments.
“SEC Nigeria has consistently shown that it has a clear understanding of her role in creating a conducive environment for the growth and development of Virtual Financial Assets, and Cryptocurrencies in general. This recent publication will act as a catalyst for mass adoption. It will also create the much needed institutional investor confidence for the Nigeria Capital Market.”
SEC proposes blockchain, investments regulation bills of crypto
Any person (individual or corporate), whose activities involve any aspect of Blockchain-related and virtual digital asset services, must be registered by the Commission and will be subject to the regulatory guidelines. Such services include, but are not limited to reception, transmission, and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian, or nominee services.
Issuers or sponsors (start-ups or existing corporations) of virtual digital assets shall be guided by the Commission’s regulation. The Commission may need Foreign or non-residential issuers or sponsors, to establish a branch office within Nigeria.
However, foreign issuers or sponsors will be recognized by the Commission, where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.
A recognition status will also be accorded, where the country of the foreign issuer or sponsor is a member of the International Organization of Securities Commissions (IOSCO).
For these reasons, the Commission has adopted the following with respect to virtual Crypto Assets
Crypto Asset means a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account, and/or a store of value, but does not have legal tender status in any jurisdiction.
Crypto Asset is neither issued nor guaranteed by any jurisdiction, and fulfils the above functions only by agreement within the community of users of the Crypto Asset, and distinguished from Fiat Currency and E-money.