Nigeria’s Securities and Exchange Commission (SEC) has put forth a proposal to amend regulations governing platforms offering crypto services, suggesting a substantial increase in the registration fee for crypto exchanges from 30 million naira ($18,620) to 150 million naira ($93,000).
The SEC stated that these proposed changes aim to enhance clarity and integrate feedback from industry stakeholders, particularly following engagements with the Central Bank of Nigeria. Initially issued in May 2022, the SEC’s rules and guidelines for all crypto and digital asset service providers are now under review with the suggested amendment introduced on Friday, March 15, 2024.
Under the updated guidelines, digital asset exchanges, offering platforms, and custodians will face higher application and processing fees. The application fee is set to increase to 300,000 naira ($186) from 100,000 naira ($62), while the processing fee will surge from 300,000 naira ($186) to 1 million naira ($620). Additionally, the registration fee will see a significant spike of 400%, rising from 30 million naira to 150 million naira.
One notable proposed change involves renaming the rules and guidelines from “New Rules on Issuance, Offering Platforms and Custody of Digital Assets” to “Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody” for improved clarity and alignment with stakeholder input.
While the SEC attributes these amendments to industry feedback and aims for clarity enhancement, concerns have been raised regarding the high paid-up capital requirement of 500 million naira ($310,343), with critics suggesting that this could potentially favor foreign entities over local firms.
Nigeria has emerged as one of the fastest-growing crypto economies globally in recent years. The country ranked as the second-biggest economy in terms of crypto adoption in 2023. Following the decision to allow the naira to trade freely in June 2023 after abandoning its currency peg, Nigeria faced significant inflation challenges. By January 2024, consumer inflation had risen for the 13th consecutive month to nearly 30%, as reported by the National Bureau of Statistics.