Nigeria’s SEC Urged to Classify Bitcoin and Ether as Commodities for Better Regulation

Nigeria’s securities regulatory body has been advised to regulate Bitcoin and Ether as commodity assets as part of its efforts to perfect crypto regulation.

Nigeria is a major hub for P2P crypto traders. Despite the Central Bank of Nigeria’s (CBN) 2021 crypto banking ban and order against trading cryptocurrencies, people continued to trade via P2P methods. In December 2023, CBN allowed crypto trading but kept the banking ban in place.

In response to a recent court ruling in Illinois that classified Bitcoin and Ether as commodities, Nigerian stakeholders are advocating for the Nigerian Securities and Exchange Commission (SEC) to adopt a similar regulatory framework. This push for clarity and proper classification arises as cryptocurrencies increasingly impact the global financial landscape.

Lucky Uwakwe, chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), emphasised the necessity of defining the class of crypto assets clearly.

In an interview with a popular crypto news website Cointelegraph, Uwakwe highlighted the importance of a well-defined regulatory environment to push the growth and innovation in the cryptocurrency space. The majority of the Nigerian stakeholders believe that classifying Bitcoin and Ethereum as commodities will provide a more tailored and effective regulatory framework for the cryptocurrencies.

Uwakwe noted that both the financial regulatory bodies, namely the SEC and CFTC, agree on the commodity status of Bitcoin and Ether. However, he noted that the distinction between proof-of-stake (PoS) and proof-of-work (PoW) protocols could influence the classification of particular crypto assets.

Uwakwe emphasised the importance for regulatory clarity, suggesting that Nigerian regulators consider these nuances to create a comprehensive and effective framework. By aligning with the CFTC’s approach, Nigerian lawmakers can provide a better & clearer regulatory environment for cryptocurrencies, fostering innovation and growth in the sector.

As cryptocurrencies continue to play a significant role in the global financial landscape, the push for proper classification and regulation becomes increasingly crucial. Uwakwe’s call to the Nigerian Securities and Exchange Commission (SEC) underscores the need for a tailored regulatory approach that reflects the unique characteristics of these cryptocurrencies.

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