The Securities and Exchange Commission (SEC) has released a new set of rules to guide digital assets traders and investors in Nigeria. 

In its new regulation titled ‘New Rules on Issuance, Offering Platforms, and Custody of Digital Assets‘, the regulatory body said it would mandate the registration of “the offering and sale of digital tokens that are considered securities.” 

It added that the rules would apply to all issuers seeking to raise capital through digital asset offerings.

The document listed digital asset offering platforms (DAOPs), digital asset custodians (DACs), virtual assets service providers (VASPs), and digital assets exchange (DAX) as digital asset actors. 

The regulatory body said applications submitted before it would be reviewed within 30 days. Then it would determine if the digital asset proposed to be offered constitutes a “security” under the Investment and Securities Act of 2007.

“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,” the document said. 

The document also outlined that issuers might only raise funds within the limit of N10 billion, however, this amount would be subject to review by the regulator.

The new regulations contrast the decision of the Central Bank of Nigeria (CBN), which ordered commercial banks to suspend transactions in cryptocurrencies last year. 

Last February, Timi Agama, Head of Department, Registration, Exchanges, Market Infrastructure and Innovation Department of SEC described the cryptocurrency market as an air that could currently not be caged or regulated. 

Mr Agama said that although the regulatory body or the capital market would not accommodate or encourage any fraudulent practices that allowed for money laundering, cryptocurrency was a market to look into.