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Stakeholders Call for Clarity in Regulation and Standardization of Nigeria's Digital Asset Market

Sep 28, 2020   •   by   •   Source: Proshare   •   eye-icon 1894 views

Monday, September 28, 2020 / 06:35AM/Nifemi Taiyese for Proshare WebTV/ Header Image Credit: CoinNewsExtra


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Stakeholders at the CoinNewsExtra 2020 forum agreedthat there is a need for clarity in the regulation and standardization of theDigital Asset Market in Nigeria. Looking at the subject of "Interpretation ofNigeria's SEC Regulation (Statement on Digital Assets and their Classificationand Treatment) of Cryptocurrency in Nigeria" which brought together experts inthe cryptocurrency marketplace, it was an opportunity to assess the changingface of the Nigerian crypto market.


Mr. Paul Ezeafulukwe the President of Stakeholders inthe Blockchain Association of Nigeria in his remarks said many people havefallen victim to scams in the sector, and it was clear that there have beenabuses in the cryptocurrency space which informed the need for regulations.


He called for stakeholders in the cryptocurrencyecosystem to have regular interfacing with the Securities and ExchangeCommission.


"There are some individuals who do not understand howcryptocurrency works which are why SEC Nigeria released the policy statement,that explains the offerings and also provides room for recommendations," hesaid.


Ezeafulukwe speaking further said in all fairness, apolicy statement such as the one released by the Securities and ExchangeCommission (SEC) cannot be a blanket statement, it needs to be narrowed downfor the sake of the general public. Such a statement will only cause frictionbetween industry players and agencies.


He added, "To come up with recommendations, theplayers in the Nigerian sector need to look at what other countries who arevast in the field are doing and adapt it to suit our clime".


The President of the SBAN said it was important toexamine the tax implications of transactions for cryptocurrencies, and how taxcan be imposed on capital gains.


On his part, Mr. Chuta Chimezie the Founder ofBlockchain Nigeria asserted that policies, regulations and standardization arepart of the process for mass adoptions. He highlighted that those in the cryptospace are risk-takers, hence the need to utilize blockchain technology forwhich it is designed for.


According to him policymaking and regulations are keythings that need to be put in place in the cryptocurrency ecosystem in Nigeria.Chimezie also noted that the publication by the Securities and ExchangeCommission was very clear as to who and what can be regulated. He stated thatthe digital assets offerings must be registered and subject to regulatorycompliance.


"There has to be a level playing ground for everyonein the sector, hence the regulation is purely targeted at the service providersand how the stakeholders in that space interact," Chimezie said.


"There is always a way to bypass laws, however, itremains important that the ground rules are set by SEC. The baseline rules willhelp to caution the influx of foreigners and will also allow foreign investorsto receive a go-ahead from the SEC when entering the Nigerian Business Climefor Crypto".


According to him, the statement released by SEC Nigeria now indicates that it is legal to talk about digital assets as asubject matter in the public domain without being subject to harassment.


The Senior Partner Financial Forensics/ Virtual AssetsRegulatory Advisory, Mr. Adedeji Owonibi, in his remarks said several peoplethat are organized businesses will only operate in an organized system withlaid down ground rules to avoid confusion; an important reason for SEC steppingin. He agreed that there was a need for accountability in the cryptocurrencyecosystem.


"Within the cryptocurrency space, there are differentclassifications of crypto assets technology that are backing it. To regulatethe function of activity that cryptocurrency plays the regulators need tounderstand the function of the technological assets. Many activities are beingconducted in the space already hence the need for SEC to step in. It istherefore imperative to provide a standard operating procedure within theNigerian business environment" Owonibi said.


He said there is a need to perform detailedinvestigations to identify the virtual assets service providers and thebusinesses that trade crypto assets.


Speaking further Mr. Owonibi said the policy statementwill help in developing the capacities of the ecosystem in Nigeria. This newguidelines for him will ensure foreign players present their footprint ofactivities in Nigeria to SEC, before gaining the clearance to issue cryptoservice to Nigerian citizens.


The financial expert was optimistic that the SECstatement gives digital assets a positive posture, as asset managers andcorporates can begin to learn more about the opportunities which will open upthe economy as people try out the new asset class.


Mr. Lucky Uwakwe Founder SaBi Groups, believed technologyis a space that is difficult to regulate, and the mechanism to hold peopleaccountable is not feasible.


Talking from the perspective of an industry player,Lucky mentions that there are ways for more people to migrate to tradingdigital assets in no distant time due to the borderless nature of blockchain.He acknowledged the statement by the Securities and Exchange Commissionhighlighting the fact that mechanisms are being put in place to checkmate theactivities in the industry.


Speaking on the position of SEC Nigeria Uwakwe opinedthat it does not stifle technology growth but rather encourages innovation inthe local scene.


Chimezie in his concluding remarks at the webinarstated that there is no regulation document yet as the rules will be made inanother document to guide the operations of digital assets.  For now, thereleased document is just a policy statement. 


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Related News on DigitalAssets

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