Nigerian SEC Plans To Hike Crypto Exchange Registration Fees

The Nigerian Securities and Exchange Commission (SEC) has put forth a proposal to amend the regulations governing platforms offering cryptocurrency services, which will see a substantial increase in the registration fees for crypto exchanges.

According to information found on the official page of the Nigerian SEC, the proposed amendment indicates a substantial increase in registration fees for crypto exchange operators, with the fee potentially rising from 30 million naira ($18,620) to 150 million naira ($93,000).

SEC Rationale for Fee Increases

The SEC attributes the incentive for these proposed changes to the necessity for clarity and the integration of feedback from industry stakeholders, particularly following recent interactions with the Central Bank of Nigeria (CBN). The restrictions imposed on crypto trading by the CBN were only lifted in December of 2023.

The existing operational regulation, initially released in May 2022, is expected to be updated to encompass contemporary conditions, with new rules and guidelines applicable to all crypto and digital asset service providers, potentially subject to modifications.

Is the Nigerian SEC Fees Overly Prohibitive?

The proposed amendment highlights several significant changes, including hikes in the fees linked to registration. Notably, the application fee for digital asset exchanges, offering platforms, and custodians is slated to increase from 100,000 naira ($62) to 300,000 naira ($186).

Moreover, the processing fee is set to jump from 300,000 naira ($186) to 1 million naira ($620), signifying a considerable financial challenge for entities aiming for registration or activity within the Nigerian crypto market.

There has been increased scrutiny of crypto activities in Nigeria. Despite Binance removing the Nigerian Naira from its peer-to-peer (P2P) trading platform, Nigerian authorities are intensifying their examination of crypto activities, exemplified by their request for Binance to provide information on its top 100 users.

Critics Reaction

In addition to fee adjustments, the SEC suggests renaming the regulations and guidelines to cover a wider range, now designated as “Regulations on Digital Assets Issuance, Offering Platforms, Exchange, and Custody.” 

These revisions are aimed at improving clarity and aligning regulatory frameworks more effectively within the dynamics of digital asset services.

Although the SEC credits industry stakeholders and recent discussions with regulatory authorities for these revisions, apprehensions have surfaced about the substantial rise in the paid-up capital requirement, set at 500 million naira ($310,343). Critics contend that these elevated fees could unfairly advantage foreign companies over domestic ones, possibly impeding local market entry.

At the beginning of the year, some crypto analysts from Nigeria advocated for a comprehensive reassessment of the Nigerian Securities and Exchange Commission’s (SEC) current regulations, deeming them excessively limiting for domestic crypto exchanges.