Nigeria Gives Cryptocurrency Laws in an Attempt to Increase Crypto Use

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Securities Exchange Commission of Nigeria gives regulatory laws on the provision, conversion, and possession of Cryptocurrency in the nation. This move came 1 year and Six months following the Commission’s first declaration on how it will group and handle Crypto in the nation.

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This move is in disparity with the nation’s Central Bank stand: which stops financial organizations in the nation from transacting with cryptocurrency-associated businesses. Mainly, the laws require platforms where Crypto exchange occurs, to keep a trust account with recipient banks.

Generally, this turn of an event may bring justification to cryptocurrency-associated businesses, and finally, make ways for better Crypto usage in the nation. SEC’s laws can as well provide the nation’s Central Bank with a structure, with which financial organizations in Nigeria, can interrelate with cryptocurrencies.

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Laws Guiding Crypto-Exchange Operations in Nigeria
SEC’s new laws call for crypto-exchanges to obtain a license, making their records accessible to the SEC. Exchanges are anticipated to remit records containing their transactions for every week and month. Also, they are to remit quarterly and yearly financial compliance statements to the SEC.

It is key to note that the conversion of a Crypto (Digital Asset) will not be possible until the SEC authorizes it. An exchange must apply for all the crypto that it wants to list for exchange. This submitted application must show that the exchange has enough information about the project and the risk there-off. Exchanges are also obligated to monitor the cryptocurrency market.

Laws Guiding the Provision of Token in Nigeria
All Cryptocurrency project – that wants to carry out an initial coin offering in the nation must make their intention known to the Securities Exchange Commission via filling out an assessment form and remitting a detailed copy of its Document to the SEC. Once the SEC regards the intended token as a security, then the provider is obligated to abide by the nation’s securities laws.

Laws Guiding the Operation of a Crypto Offering Platforms
(Digital Asset Offering Platform: a “DAOP”) A crypto offering platform: otherwise known as a Digital Asset Offering Platform (DAOP), is a platform,  where a producer of such Crypto can start an initial coin offering. The SEC came up with guidelines for the operation of a DAOP and it states that:

  1. A Crypto Offering Platform must critically study all projects seeking to give out Crypto via its platform. They must also judge if the project is suitable  to source for capital.
  2. A Crypto Offering Platform is responsible for making information about projects on its lists available to investors.
  3. It must also oversee the proper utilization of the capital which was raised for the project.

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Laws Guiding the Possession of Crypto
As the law only allows the operation of the crypto-keeping business in the nation, it doesn’t seem to give exchangers and DAOP operators the liberty to use independent custodians. A crypto Offering Platform can only have its custody services if it abides by related laws. No exact conditions exist about how exchangers must keep the user’s Crypto or coin. Regulators in the nation only demand that custodians must differentiate between customer’s and their own crypto or coin.

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