Nigeria’s SEC Proposes 400% Increase to Crypto Firm Registration Fees

In a move that has stirred controversy within the cryptocurrency industry, Nigeria’s Securities and Exchange Commission (SEC) has proposed sweeping amendments to the existing rules governing crypto firms operating in the country. 

The most significant change involves a substantial 400% increase in registration fees for crypto issuers, exchanges, and custody platforms.

According to a notice published on Friday, the SEC proposed hiking the application fee from 100,000 naira ($64) to 300,000 naira. 

More notably, the registration fee for crypto firms could skyrocket from 30 million naira to 150 million naira, representing a 400% increase.

The proposed amendments come when the Nigerian government grapples with a weakening naira and blames the cryptocurrency industry for facilitating illegal capital outflows. 

Reports have surfaced that the SEC is updating its guidelines for crypto service providers in response to these concerns.

While the government’s actions have impacted several crypto firms, officials have singled out the global exchange platform Binance, accusing it of manipulating the naira exchange rate. 

Nigeria has detained two Binance executives and is reportedly considering hefty penalties against the firm.

In addition to the fee hikes, the SEC has proposed doubling the minimum paid-up capital (non-borrowed capital) requirement for interested crypto service providers to 1 billion naira. 

These proposals aim to “provide clarity to the market as well as to incorporate suggestions from industry stakeholders particularly with regards to the recent engagements with the central bank of Nigeria,” according to the SEC’s statement.

Related: Binance Executives Detained in Nigeria Amid Naira Crisis and Crypto Crackdown

Industry Backlash and Concerns

The proposed fee increases have sparked a backlash from the cryptocurrency industry, with concerns that the exorbitant fees could stifle innovation and drive away local players. 

Some industry stakeholders have decried the proposed 500 million naira paid-up capital requirement, arguing that it would primarily benefit foreign companies while disadvantaging local players.

As the SEC seeks to tighten regulations and align with the central bank’s stance on cryptocurrencies, the industry fears that the proposed changes could create unnecessary barriers and hinder the sector’s growth in Nigeria.

While the Nigerian government’s concerns about illegal capital outflows and potential economic instability are understandable, the proposed fee hikes and regulatory changes have raised questions about striking the right balance between oversight and fostering innovation in cryptocurrency.

The outcome of this regulatory overhaul will have far-reaching implications for the future of cryptocurrencies in Nigeria and potentially set a precedent for other African nations grappling with similar challenges.