SEC pegs maximum amount to be raised from Digital Assets offering at N10bn

Nigeria’s Securities and Exchange Commission (SEC) has pegged the maximum amount to be raised from Digital Assets Offering within any continuous 12month period at N10billion.
The limit is contained in the Commission’s New Rules on Issuance, Offering Platforms and Custody of Digital Assets.

These rules, according to the Commission would apply to all issuers seeking to raise capital through digital asset offerings.

It defined Digital Asset as a digital token that represents assets such as a debt or equity claim on the issuer; and include in Initial Coin offering and other Distributed Ledger Technology offers of digital assets.

The New Rules stated that the issuer must demonstrate that the gross proceeds to be raised from the digital asset offering would be sufficient to undertake the project as proposed in the white paper.

It said, “An issuer may only raise funds subject to the following limit: Twenty times the Issuer’s shareholders’ funds i.e., the maximum quantum of funds permitted to be raised within any continuous 12month period, subject to a ceiling of N10bn or any other ceiling as the Commission may determine from time to time.

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“The issuer shall demonstrate that the gross proceeds to be raised from the digital asset offering would be sufficient to undertake the project as proposed in the white paper.

“In the event that the amount raised is below the soft-cap, the Issuer shall refund all monies collected from the token holders within five business days from the offer closing date.”

On the investment limit, the Commission stated in the document that a person may invest in an initial digital asset offering subject to the various limits.

For qualified institutional and high net worth investors, it noted that there will be no restriction on investment amount.

But for retail investors, the document fixed a maximum of N200,000 per issuer with a total investment limit not exceeding N2m within a 12-month period

It said, “A person may invest in an initial digital asset offering subject to the following limits:

“For qualified institutional and high net worth investors, no restriction on investment amount; and for retail investors, a maximum of N200,000 per issuer with a total investment limit not exceeding N2 million within a 12-month period.”