SEC Explains Decision to Regulate Crypto Assets
CBN GOVERNOR
*Says its role does not conflict with CBN circular closing crypto accounts
The Securities and Exchange Commission (SEC) Thursday explained its decision to regulate digital assets, including crypto assets, saying this was due to increasing flows of such assets.
SEC in a statement said that the Commission had in September last year identified crypto assets as security which should fall under its regulation.
Refering to the circular by the Central Bank to close down crypto accounts with banks despite regulation by SEC, the statement said there was no conflict between its roles put out last year and the circular by the CBN on the issue.
The statement from SEC reads, “We see no such contradictions or inconsistencies. In recognition of the fact that digital assets may have the full characteristics of investments as defined in the Investments and Securities Act 2007, the SEC statement asserts that trading in such assets falls under SEC’s regulatory purview, except proven otherwise
“The primary objective of the statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market.
“The SEC made its statement at the time to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.”
“Subsequently, in its capacity as the regulator of the banking system, the CBN identified certain risks, which if allowed to persist, will threaten investor protection, a key mandate of the SEC, as well as financial system stability, a key mandate of the CBN.
“In light of these facts, we have engaged with the CBN and agreed to work together to further analyse, and better understand the identified risks to ensure that appropriate and adequate mitigants are put in place, should such securities be allowed in the future.”
The Securities and Exchange Commission (SEC) Thursday explained its decision to regulate digital assets, including crypto assets, saying this was due to increasing flows of such assets.
SEC in a statement said that the Commission had in September last year identified crypto assets as security which should fall under its regulation.
Refering to the circular by the Central Bank to close down crypto accounts with banks despite regulation by SEC, the statement said there was no conflict between its roles put out last year and the circular by the CBN on the issue.
The statement from SEC reads, “We see no such contradictions or inconsistencies. In recognition of the fact that digital assets may have the full characteristics of investments as defined in the Investments and Securities Act 2007, the SEC statement asserts that trading in such assets falls under SEC’s regulatory purview, except proven otherwise
“The primary objective of the statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market.
“The SEC made its statement at the time to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.”
“Subsequently, in its capacity as the regulator of the banking system, the CBN identified certain risks, which if allowed to persist, will threaten investor protection, a key mandate of the SEC, as well as financial system stability, a key mandate of the CBN.
“In light of these facts, we have engaged with the CBN and agreed to work together to further analyse, and better understand the identified risks to ensure that appropriate and adequate mitigants are put in place, should such securities be allowed in the future.”
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