SEC sets limit of N10bn to be raised from digital assets

The Securities and Exchange Commission has set the maximum amount that can be raised through Digital Assets Offering in any consecutive twelve-month period at N10 billion.

According to the Commission, these rules would apply to all issuers looking to raise capital through digital asset offerings.

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

It defined a digital token as a token that represents assets such as a debt or equity claim on the issuer, and it includes digital asset offerings in Initial Coin Offerings and other Distributed Ledger Technology offerings.

According to the new rules, the issuer must show that the gross proceeds raised from the Digital Asset will be sufficient to complete the project as described in the white paper.

“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 12 month period, subject to a ceiling of N10 billion or any other ceiling as the Commission may determine from time to time.

“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, ” it stated.

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

There will be no investment limit for qualified institutional and high net worth investors, the commission added.

However, the document set a maximum investment limit of N200,000 per issuer and a total investment limit of N2 million in a 12-month period for retail investors.