Nigerian SEC Proposes Hike in Crypto Exchange Registration Fees

1. Nigerian SEC suggests sharp fee increases for crypto exchanges and custodians, sparking debate over potential impacts.
2. SEC aims to align regulations with recent discussions with the Central Bank of Nigeria, but critics question high paid-up capital requirements.
3. Despite economic challenges, Nigeria’s crypto economy flourishes, ranking second globally in adoption in 2023.

Nigeria’s Securities and Exchange Commission (SEC) has stirred controversy with its proposal to increase registration fees for crypto exchanges. The amendment suggests a substantial hike from 30 million naira ($18,620) to 150 million naira ($93,000). Accordingly, this attributed to recent engagements with the Central Bank of Nigeria (CBN).

Fee Surge and Industry Response

Under the updated guidelines, digital asset exchanges and custodians face a sharp rise in application fees from 100,000 naira ($62) to 300,000 naira ($186). Processing fees have surged from 300,000 naira ($186) to 1 million naira ($620). Whereas the registration fee has spiked by 400% to 150 million naira ($93,102).

Despite claims of incorporating stakeholder input, critics argue that the proposed 500 million naira ($310,343) paid-up capital requirement may favor foreign firms over local entities.

The SEC justifies the amendments as efforts to enhance clarity and align regulations with recent discussions with the CBN. Renaming 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” reflects this aim.

Rising Crypto Landscape in Nigeria

Nigeria has witnessed rapid growth in its crypto economy, becoming one of the world’s fastest-growing markets. In 2023, it ranked second globally in crypto adoption. However, economic challenges persist, as Nigeria abandoned its currency peg in 2023. In fact, it is leading to record-high inflation, with consumer inflation hitting nearly 30% in January 2024.

The proposed fee hikes and regulatory changes could impact the burgeoning crypto sector in Nigeria, potentially favoring larger foreign entities over local startups.

Critics argue that such stringent requirements could stifle innovation and hinder the growth of homegrown crypto businesses. As the debate unfolds, stakeholders await further clarity on the SEC’s proposed amendments and their implications for the Nigerian crypto ecosystem.