Review of Nigeria’s Coin Offering (ICO) Market

ICO, IPOs, Crowfunding, Nigeria, Cryptocurrency, Bitcoin,

The initial coin offering (ICO) is a way or raising money using cryptocurrency. The funds are raised for startups or businesses. The company gives their own coin that has a structure like that of Bitcoin. The coin is then exchanged for funds to help them grow their businesses. Investors then buy the coins with the hope that they will appreciate in value in future.

The ICO allows potential investors to acquire a small share in the company. The share is then exchanged for investment with the hope of earning a profit. But, the profit is not in form of cryptocurrency. To start an ICO, the company must first announce their project print it with details of the project. Later on, they are free to sell it. Startups managed to raise a total of $5.6 billion in 2017 via ICOs.

ICOs and initial public offers (IPO) are the same given that they both raise money for companies. But they are also different in the way they work. Nigerian startups and small businesses found it hard to be listed on the stock exchange. This is because of the decentralized and unregulated nature of blockchain. But the ICOs are illegal in both South Korea and China. But South Korea has not clearly come out to confirm the ban. Japan is also moving towards China and South Korea. Many countries are still taking their time to understand the regulations and legality of the ICOS.

Nigeria on the other side has not illegalized ICOs due to lack of laws. But, equity crowdfunding is illegal in Nigeria. This is because of the provision of the Investment and Securities Act (ISA) and Allied Matters Act (CAMA). ICOs and equity crowdfunding have more or else the same structure. Therefore one can argue that they are also not covered by the law. This can then confirm why SureRemit uses ICOs in South Korea.

SureRemit startup raised $7 million via ICOs in January 2018. But the ICO is not seen as the main source of startup funding in Nigeria. ICOs will not be able to replace the traditional investors. But the fact remains that the ICO is there to stay in Nigeria. The lack of regulations on the ICO it also comes with a risk of defrauding investors. The best example is LoopX the latest ICO fraud.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on and we base our discussion on technology in Africa and the rest of the world.
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