The Securities and Exchange Commission says it will not be considering cryptocurrencies in its push for digital assets.
The commission in February 2021 suspended the approval of cryptocurrencies and related products and warned the investing public against crypto and crowdfunding platforms.
Despite the ban, Nigerians continued to show interest in the crypto market. In May 2022, it released guidelines on the issuance and custody of digital assets in the country, a move seen as supporting the adoption of crypto.
The director-general of the commission, Lamido Yuguda, on Friday told reporters in Lagos that the commission was avoiding the digital currency as crypto exchanges do not have access to the banking platform that is needed to drive their trades in Nigeria yet.
“We are looking at digital assets that really protect investors,” not necessarily crypto, bloomberg reported him saying.
He said the SEC will promote investment in “sensible digital assets,” with investment protection and also explore blockchain technology to advance virtual and traditional investment products.
“The commission is in the business of protecting investors, not in the business of speculation,” he said, alluding to volatility concerns in cryptocurrencies.
He however said SEC may promote crypto as the digital assets market undergoes development.
“Now any asset that is traded in the Nigerian capital market requires the joint approach of different regulators,” he said.
The guidelines it released in May mandates the registration of “the offering and sale of digital tokens that are considered securities”, saying the rules shall apply to all issuers seeking to raise capital through digital asset offerings.
According to the regulation, digital asset actors include digital asset offering platforms (DAOPs), digital asset custodians (DACs), virtual assets service providers (VASPs), and digital assets exchange (DAX).
The commission said it would review applications within 30 days before determining whether the digital asset proposed to be offered constitutes a “security.”
“The commission may reject any application for registration of digital assets if, in its opinion, the proposed activity infringes public policy, is injurious to investors or violates any of the laws, rules and regulations implemented by the commission,” it said.
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