Nigeria’s Securities and Exchange Commission (SEC) has proposed significant changes to the rules governing platforms offering crypto services, including a substantial increase in registration fees for crypto exchanges. This move, if implemented, would see the registration fee skyrocket from 30 million naira ($18,620) to 150 million naira ($93,000).
SEC’s Proposed Amendments
The proposed amendments aim to provide clarity and incorporate feedback from industry stakeholders, particularly following engagements with the Central Bank of Nigeria (CBN). Initially issued in May 2022, the SEC’s rules and guidelines for crypto and digital asset service providers are now under review, with proposed changes unveiled on Friday, March 15, 2024.
Under the updated guidelines, digital asset exchanges, offering platforms, and custodians will face increased financial obligations. For instance, the application fee would rise from 100,000 naira ($62) to 300,000 naira ($186). Moreover, the processing fee would surge from 300,000 naira ($186) to 1 million naira ($620).
While the SEC attributes these changes to industry feedback, some have voiced concerns about the proposed paid-up capital requirement of 500 million naira ($310,343). Critics argue that this hefty fee could favor foreign firms over local entities, potentially creating a disadvantage for domestic players in the crypto space.
Nigeria’s Growing Crypto Economy
Nigeria has witnessed exponential growth in its crypto economy, becoming one of the world’s fastest-growing markets in recent years. In 2023, it ranked as the second-biggest economy globally in terms of crypto adoption. Additionally, Nigeria was identified as the most crypto-obsessed country based on Google search volumes for cryptocurrency-related terms.
Nigeria’s decision to abandon its currency peg in June 2023 led to significant economic shifts, including record-high inflation rates. By January 2024, consumer inflation had risen for the 13th consecutive month, reaching nearly 30%, according to data from the National Bureau of Statistics.
As the SEC’s proposed amendments undergo review, stakeholders in Nigeria’s crypto ecosystem await further developments and assess their potential implications on the country’s digital asset landscape.
