Nigeria’s SEC Announces New Rules on Issuing Digital Assets

The Nigerian Securities Regulatory Authority has published new rules for digital asset issuance. The new rules also include registration requirements for platforms offering digital assets.

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The Nigerian Securities and Exchange Commission (SEC) has published new rules governing the issuance of digital assets as securities. The regulation also contains rules for registration requirements for digital asset delivery platforms (DAOPs). Virtual Asset Service Providers (VASPs) and digital asset exchanges are covered in a new set of rules recently announced by the Commission.

According to new regulations, an individual or entity seeking to raise funds through a coin offering or private sale of tokens must first submit an initial “Evaluation Form and Draft White Paper”. In the draft white paper, the Commission states that agencies seeking operating licenses must provide “complete and up-to-date information on initial digital asset delivery projects, business plans and feasibility studies.”

The draft document should also provide a brief description of the initial digital asset offering, the value of each token, and the rights it grants to the purchaser. The SEC said it should also specify the use and allocation of funds.

White Paper Disclaimer

Regarding the white paper of the initial digital asset offering project, the committee said that the document should contain a disclaimer stating that this does not represent an offer for sale. Once the necessary documents are submitted, the SEC will review them and make a decision.

[The Commission shall] The same review will be conducted within 30 days of receipt to determine whether the proposed digital asset constitutes a ‘security’ under the Investment and Securities Act of 2007.

If a decision is made, the SEC will notify the issuer within five days of the end of the review.

In addition to outlining the steps that potential issuers of digital currencies must take, the Commission also lists requirements and restrictions that must be followed. Applicants wishing to register with the DAOP will be required to pay a filing fee of $241, a processing fee of $724, and a registration fee of $72,430 under the new rules.

Elsewhere in the new rules document on page 54, the Commission states that the DAOP must “maintain and enter into registration the registration of initial token holders who subscribed to virtual assets/digital tokens during the offering period”. While using other platforms as hosts, the SEC said, “Issuers must not be simultaneously hosted on multiple DAOP or equity crowdfunding platforms.”

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Terrence Jimwara

Terence Zimwara is an award-winning Zimbabwean journalist, author and author. He has written extensively on the economic hardships of some African countries and how digital currencies can provide Africans with an escape route.

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