Nigeria’s Securities Exchange Commission (SEC) is proposing changes to the rules governing crypto services platforms. The proposed amendments include a significant increase in the registration fee for crypto exchanges, from $18,620 to $93,000. The SEC stated that these changes were made to provide clarity and incorporate suggestions from industry stakeholders, particularly in light of recent engagements with the Central Bank of Nigeria (CBN). The SEC initially issued rules and guidelines for crypto and digital asset service providers in May 2022, but now, they are suggesting amendments to these rules.
Under the updated guidelines, digital asset exchanges, digital asset offering platforms, and digital asset custodians will be required to pay higher filing and application fees, with the registration fee also increasing by 400%. The processing fee has also surged by a substantial amount. The SEC is proposing to rename 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.” The SEC explained that these changes aim to enhance clarity and incorporate input from industry stakeholders, as well as insights from recent discussions with the CBN.
While the SEC attributes the proposed changes to input from industry stakeholders, some have criticized the requirement of a $310,343 paid-up capital. Critics argue that this high fee would favor foreign firms and disadvantage local entities. It is worth noting that Nigeria has experienced significant growth in its crypto economy in recent years, becoming one of the fastest-growing crypto economies globally. In 2023, Nigeria was the second-largest crypto-adopting country in the world. The country’s interest in cryptocurrency is also reflected in the number of Google searches for “cryptocurrency” or “buy crypto,” which led Nigeria to be named the most crypto-obsessed country worldwide.
The country’s decision to allow the naira to trade freely in June 2023, abandoning its years-long currency peg, has had consequences. Nigeria has faced record-high inflation, with consumer inflation rising for the 13th consecutive month in January 2024, reaching nearly 30%, according to data from the National Bureau of Statistics. These economic challenges may play a role in the SEC’s proposed amendments to regulate the crypto industry more tightly. Concerns have been raised regarding the potential impact on local entities and the dominance of foreign firms in the market. The SEC’s amendments are now under consideration, and their implementation will have a significant impact on the crypto landscape in Nigeria.
Nigeria had the potential to become a hub for crypto innovation, but with these changes, it’s becoming less likely. Frustrating. 😔🔐
With these amendments, the SEC is hindering the progress of the crypto industry in Nigeria and limiting opportunities for local businesses.
These amendments show a lack of understanding regarding the potential of the crypto economy in Nigeria. It’s a missed opportunity.
The SEC’s efforts to enhance clarity and incorporate insights from recent discussions with the CBN will create a more robust regulatory framework for Nigeria’s crypto industry.