In a bid to fortify oversight and enhance risk management within Nigeria’s rapidly expanding cryptocurrency sector, the Securities and Exchange Commission (SEC) has unveiled a proposal to significantly raise the minimum paid-up capital requirement for crypto exchange registration.
Currently standing at ₦500 million ($314,000), the minimum paid-up capital is slated for a substantial increase to ₦1 billion ($628,000), according to the SEC’s latest proposal. This move is aimed at elevating standards for crypto exchange registration and fostering a more robust regulatory framework.
Under the Commission’s rules and regulations, fidelity bonds are mandated to cover at least 25% of the minimum paid-up capital. Additionally, the SEC retains the discretion to impose additional financial requirements on Digital Asset Offering Platforms (DAOPs) to address specific operational risks inherent in their activities.
The proposed changes come in the wake of consultations with industry stakeholders and discussions with the Central Bank of Nigeria (CBN). The SEC emphasizes that these amendments aim to provide clarity and reflect input from various market participants.
In May 2022, the Nigerian SEC initially introduced rules and guidelines for all crypto and digital asset service providers. However, in a recent development on Friday, March 15, 2024, the Commission recommended revisions to these regulations in response to evolving market dynamics and emerging risks.
As Nigeria’s cryptocurrency landscape continues to evolve, regulatory authorities are stepping up efforts to safeguard investor interests and maintain financial stability amidst the growing popularity of digital assets. The proposed increase in capital requirements underscores the SEC’s commitment to fostering a secure and transparent environment for crypto market participants.
