The Securities and Exchange Commission (SEC) of Nigeria has announced proposed revisions to the regulatory framework for cryptocurrency service platforms.
The adjustments include a substantial increase in the registration fee for cryptocurrency exchanges, escalating from 30 million naira ($18,620) to 150 million naira ($93,000).
The overhaul aims to tighten the financial requirements for digital asset exchanges (DAX), digital asset offering platforms (DAOP), and digital asset custodians (DAC), which will now face a higher filing/application fee of ₦300,000 ($186), up from ₦100,000, alongside a processing fee hike from 300,000 naira ($186) to 1 million naira ($620).
This move comes in the wake of the initial rules and guidelines issued by the SEC in May 2022 for crypto and digital asset service providers.
As of March 15, 2024, these proposed changes mark a notable shift in Nigeria’s approach to regulating the burgeoning cryptocurrency sector.
The SEC has also proposed a rebranding of the rules from “New Rules on Issuance, Offering Platforms and Custody of Digital Assets” to “Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody,” aiming to enhance clarity and reflect the input from industry stakeholders.
The SEC’s decision is partly influenced by recent discussions with the Central Bank of Nigeria (CBN), aiming to align with global standards and safeguard investors while fostering innovation within the sector.
However, the introduction of a ₦500 million paid-up capital requirement has sparked controversy, with critics arguing that such steep financial demands could disproportionately benefit foreign entities over local companies, potentially stifling domestic innovation and competition in Nigeria’s digital asset space.
The SEC’s proposed regulations underscore a delicate balance between promoting a thriving cryptocurrency ecosystem and ensuring robust regulatory oversight to mitigate risks associated with digital currencies.
As these changes await final approval, the feedback from various stakeholders will likely shape the trajectory of Nigeria’s digital asset regulatory landscape, reflecting the country’s commitment to becoming a key player in the global fintech arena while safeguarding investor interests.