Regulation
Nigerian SEC Urged to Classify Bitcoin, Ether as Commodities, Following Illinois Court Ruling
Nigerian shareholders are asking the SEC to classify Bitcoin and Ether as commodities, mirroring a recent Illinois court ruling.
Growing demand for cryptocurrency categorization
Shareholders in Nigeria are pushing for the Nigerian Securities and Exchange Commission (SEC) to follow the example of an Illinois court that recently ruled that Bitcoin and Ether are commodities.
Coin’s Telegraph shares that as cryptocurrencies gain traction in the global financial system, there is a growing chorus of voices calling for their proper categorization and further definition.
According to Lucky Uwakwe, chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), who spoke to Cointelegraph, cryptocurrency should be precisely defined.
The president argues that this method would tell manufacturers exactly where to look for regulations.
“The Nigerian SEC should bear in mind the need to lay down rules defining the asset class of cryptocurrencies or to divide the respective cryptocurrencies into asset classes and explain to the public how such cryptocurrencies can be defined as securities or commodities,” he noted.
Different protocols, different regulations
According to Uwakwe, the difference between proof-of-stake (PoS) and proof-of-work (PoW) protocols may change the categorization of particular cryptocurrencies, despite the US SEC and CFTC agreeing that Bitcoin and Ether are commodities.
In Nigeria, digital commodities have not received the same level of public attention as physical commodities, such as cash crops and agricultural products, which the Commodity Board has historically prioritized.
Nigerian government agencies show interest
According to Oladotun Wilfred Akangbe, marketing director at Flincap, an over-the-counter African cryptocurrency exchange, several Nigerian government agencies, including the CBN, SEC, FIRS, and NSA, have shown interest in cryptocurrencies.
The value of assets is now measured in Bitcoin and Ethereum, two of the most important cryptocurrencies, according to Akangbe. He emphasized that Bitcoin and Ethereum require separate methods of regulation from other cryptocurrencies.
According to Akangbe, the SEC should pay special attention to initial coin offerings (ICOs) and other forms of cryptocurrency financing. Rume Ophi, another local cryptocurrency researcher, said that each cryptocurrency should be examined separately to see if it is a security or a commodity, because they are all different.
If Nigeria is serious about creating a comprehensive regulatory framework for digital assets, it needs to listen to its stakeholders. The Nigerian Securities and Exchange Commission (SEC) can bring much-needed stability and clarity to the market by classifying Bitcoin and Ether as commodities; this will encourage innovation while ensuring regulatory compliance.