Nigeria regulators recognize digital assets in stunning new statement

The Securities and Exchange Commission of Nigeria has officially defined digital assets under its regulatory umbrella.

In a Sept. 14 statement, the Nigerian Securities and Exchange Commission, or SEC, defined tokens and coins in the country's financial markets.

The commission stated that these digital assets, which provide "Alternative investment opportunities", would be classified into four different categories for regulatory oversight.

"Virtual crypto assets are securities, unless proven otherwise," said the SEC. "The burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC, is placed on the issuer or sponsor of the said assets."

According to the announcement, Nigerian regulators will register and approve all digital assets, treating cryptocurrencies and utility tokens as commodities.

The regulatory body said it would view security tokens as securities, and derivatives and investment funds as "Specified investments."

Blockchain and crypto firms releasing Digital Assets Token Offerings, or DATOs, Initial Coin Offerings, or ICOs, and Security Token Offerings, or STOs, operating in Nigeria prior to the implementation of these new regulations will have three months to register with the SEC.Public statements from the Nigerian SEC regarding crypto and virtual currencies are rare.

Interest in crypto from its citizens may be driving Nigerian regulators to quickly rein in this budding market.

Blockchain analytics firm Chainalysis reported on Sept. 10 that Nigeria, South Africa, and Kenya lead the continent in monthly crypto transfers, which total $316 million as of June.

As of writing, Nigeria is also one of the biggest sources of Bitcoin trading volume in Africa and one of eight on the continent to host a Bitcoin ATM, as of April.