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14 Sep, 12 tweets, 3 min read
Regulation on crypto-asset in Nigeria

Nigeria’s SEC in a recent regulatory statement stated it classifies virtual crypto asset as securities (under s.13 of Investment securities act).

Meaning SEC has powers to regulate crypto asset investments (e.g crypto-token or crypto-coins)
The statement defines issuing crypto assets as a regulated activity & specifically lists:
⁃Initial coin offering
⁃Digital asset token offering
⁃Security token offering

Gives existing digital offering 3 months to submit documents for initial assessment or registration
Who is regulated?

1. Any person, (individual or corporate) whose activities involve any aspect of Blockchain-related and virtual digital asset services (They must register with SEC)

2. Issuers or sponsors (start-ups or existing corporations) of virtual digital assets
Also, Foreign or non-residential issuers of crypto-assets may be required to establish a branch office within Nigeria

Where the foreign issuer or sponsor is a member of the International Organization of Securities Commissions (IOSCO), SEC will accord similar recognition status.
SEC’s categorization of virtual assets/instruments are:

- Crypto assets (e.g non-fiat virtual currency);

- Utility Token or Non-security Token;

- Security Token;

- Derivatives and Collective Investment Funds of Crypto Assets, Security Tokens and Utility Tokens.
US SEC has always insisted oversight over Initial Coin Offerings ( and SEC v telegram case emphasized SEC’s regulatory powers. Asides KYC and information requirements, no other impact of the designation has reflected in US crypto-assets investment space.
Still, Nigeria’s SEC crypto-assets announcement is the clearest position on crypto-assets by any financial regulator in Africa & deviation from previous vague positions.

One can probably interpret this as a good development as it welcomes the regulated use of crypto assets
Asides Feb 2018 announcement by Nigeria’s central bank that virtual currencies are not legal tenders in Nigeria (…), there is also the stern Jan 2017 circular by the CBN to all Nigerian banks.
The Jan 2017 CBN regulation (… )states that till a substantive regulation or decision by the CBN, no banks/financial institutions should hold, transact, trade in virtual currencies & put effective anti-money laundering controls for virtual currency exchange
The question becomes does a substantive regulation by the SEC qualify as a “substantive regulation” to satisfy the CBN’s Jan 2017 circular or does the substantive regulation have to be one issued by the CBN?

Is a financial institution’s registration with SEC satisfactory?
Regardless, Jan 2017 CBN circular places customer identification, verification and transaction monitoring requirements (KYC) on any financial institution whose customers deal with any virtual currency operations.

One expects these KYC requirements will extend to crypto-assets.
You can find Nigeria’s SEC regulatory statement on digital & crypto assets here:…

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More from @adetolaov

14 Sep
Reading a @TechCabal’s article and intrigued with some figures, which confirm massive role Fintech & digital payments will play in Nigeria’s economic future. Let me share some:

1. Between Jan - June 2020, GTBank processed $356.4m USSD payment & added 600,000 new USSD customers.
2. Mobile & Internet Banking: Jan - June 2020, GTbank processed 95 million mobile banking transactions worth ₦5.7 trillion, and internet banking transactions grew 14% to ₦1.2 trillion.

3. Nigeria’s fintech revenues is predicted to grow to as much as $543.3 million by 2022.
4. Nigeria’s payment market is estimated to grow between $20 billion to $40 billion over the next few years.

5. In August 2020 alone, NIBSS Instant payment (NIP) transaction volume was nearly 200 million with total transaction value of almost ₦15 trillion ($38.9 billion).
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17 Aug
Quick observations for fintech businesses/digital banks from financial results of Monzo, Revolut & Starling

Lesson 1: LENDING HURTS. Starling earned 2.1m from interest but has 2.2m in bad loans. Monzo has an even riskier loan portfolio.

Lesson 2: card transaction fees still makes up a large portion of the models for the 3 digital banks - about 63% of income for Revolution, 55% for Monzo & 45% for Starling.

So earnings are not so diversified as card transactions fees is main earner. This is a major income risk.
Lesson 3: The Starling model of having a marketplace for vendors to sell their services doesn’t seem to be yielding great results. Starling only got a commission of £72,000 for period.

If the model is going to survive, volumes have to go up for commission to be worth it.
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11 Aug
From August 20, Online car hailing business (Uber, Bolt etc) must pay Lagos state a fee of NGN 10 million for every 1,000 cars. Annual renewal fee is NGN 5 million.

10% of EVERY transaction paid by every passenger will be collected by Lagos state as service tax.

The Companies must give Lagos state access to your Data and their entire database (section 4.2 of Guidelines).

The companies will push the 10% service tax to customers so the price of trips will increase.

These companies must still pay company income tax by the way.
@TechCabal reports the Guidelines for online hailing business operation of taxi in Lagos state 2020 (which created this rules) has been approved by the Governor

These rules will also make it hard for new smaller entrants into the industry.…
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7 Aug

Today, the amended Companies & Allied Matters Act was signed today by President Buhari.

Key reforms:
1. A company can now have only one shareholder
2. No need for company seal anymore
3. Incorporated Trustees (NGOs) can now merge

4. Prohibits anyone from serving as director in more than 5 public companies
5. Electronic filing, share transfer & e-meetings for private companies
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8. Authorized share capital replaced by minimum share capital
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28 Jul
Let me tell you a story about @OlumideAkpata, candidate for @NigBarAssoc president. In 2018, we had negotiated #AfCFTA & I was moving to Geneva to work with King & Spalding LLP to design Nigeria’s 1st trade remedies infrastructure to protect the economy. One evening, I got a call
Mr @OlumideAkpata , then chairman of the @nbasblofficial , had come into Abuja few days before I was to travel and wanted to speak with me. We met up. He told me, “Our conference this year is on the #AfCFTA & because you worked on it and know it, you should help with direction”
We sat in the Hotel lobby at 10pm and spoke for over 4 hours on conference topics, discussions areas, speakers, break-out sessions and the role of lawyers in the AfCFTA. For context, this was a partner in one of the most successful law firms in Nigeria and I was this young lawyer
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Here are some pointers on how to maximize your law career. This probably also applies also to any young lawyer.

A thread.
You are only as relevant as you can solve the problems of your clients. People just want their problems to go away, they don’t want to read a 30-page opinion on the legal meaning of “shall” and “may”. Build your career around solving real problems for people & businesses.
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