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May 15, 2022

Nigeria has issued new crypto rules to increase adoption

The Securities Exchange Commission (SEC) of Nigeria has issued new laws for the issuing and usage of digital assets in the nation, including cryptocurrencies.

In April 2021, Coinfomania reported that the Commission was collaborating with the Central Bank of Nigeria (CBN) to have a better understanding of cryptocurrencies in order to provide a complete guideline for the asset class.

The necessity of the Virtual Asset Service Providers (VASPs) permission or license, the measures to take when creating a digital token, and the registration requirements for digital asset platforms, exchanges, and custodians are all covered in the new SEC paper.

According to the requirements, every firm that plans to provide crypto goods or services in Nigeria or to Nigerians must get a VASP license or permission, as well as other associated documentation.

Digital asset businesses who wish to offer token sales to Nigerians must submit an evaluation form as well as a full draft whitepaper of the project, according to the SEC document. The whitepaper must include details on the project, the target market, expected earnings and bonuses, and risk estimates.

The token issuer can then register the token as securities when the SEC Nigeria completes the required evaluation and certification. In addition, anybody interested in running a digital asset launchpad or an ICO/IEO platform must meet the VASPs’ standards and pay the costs.

The application must also include specific project details, a commitment to keep investors informed about the initiative, and a commitment to appropriately oversee the use of money.

Digital asset custodians are required to defend investors’ interests, establish a friendly connection with investors, safeguard their customers’ funds, and follow all applicable rules and regulations.

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Meanwhile, it’s unclear if Nigeria’s new cryptocurrency legislation would overturn the central bank’s prohibition on digital assets. The Central Bank of Nigeria reportedly barred all banks and financial institutions in the country from serving crypto investors and businesses in February 2021.