Topic: OPERATING A CRYPTO TRADING COMPANY IN NIGERIA: REGULATORY REQUIREMENTS. (Read 95 times)

these are not criteria any exchange that wants to operate fully in Nigeria will find difficult to meet up with as it is something that they already have the capacity to do without a single form of stress. if they had thought of this while going head-to-head with binance, the matter would not have gotten to the extent where they have to arrest binance executive and cause the Naira to be delisted from the binance p2p portal.

of cause, we have a lot of local exchanges in existence and a couple of others that are still coming up. if this registration process pulls through, at least we are going to be sure that we have an idea on the position of the government and the SEC regarding crypto operation in Nigeria. for the local exchanges, they will have no option that abiding by this regulatory framework but when you consider the already existing exchange that have gotten popular in Nigeria like bybit and bitget, it's going to be difficult for them to agree to register and go through this process since it is clear that they already have the majority of the Nigerian crypto population patronizing them already.

The enforcement of suspending those Fintech banks were later lifted that's why we've got them bank with the crypto transaction.
I'll agree with you that our government hasn't been so fair and transparent with us with the same polices they proclaimes, they behave too cheap like they're only attracted to behind closed doors alignments. If u hey could speculate that we shouldn't engage on transaction with those Fintech banks and same time calls them back to operation, they don't they still make it official and let the masses know we can retrieve back to continue our crypto transactions with them after banned/suspension being lifted.

It's just sad this update is coming too late, after our Nigerian government may have portrayed a negative image into the eyes of major crypto investors and exchanges, due to how the case with Binance representatives lingered for several months, causing headlines on most crypto bulletins. Because I noticed that transparency has always been one of the major challenges most crypto exchange left, or probably delisted our NGN trading pairs from major crypto Exchanges, of which I'm sure with time, if our government could stick to been transparent as highlighted.

This is old. The paid up capital was increased to ₦1 billion in 2023 or so which was when it was modified last. Or did SEC changed it back? I guess that can not happen. SEC increased it after naira price has fallen so significantly. Also there are payments like application fee, registration fee, processing fee and sponsored fee or so that have to be paid. I looked for the PDF but I saw the one for 2022 and not 2023.

The government does not know what they are doing. That is how I have been seeing it. But about cryptocurrencies, the government were after P2P and not cryptocurrencies directly. But the way it was done looks inaccurate and like involving bribery.

I feel this may be a trap from the government. Like you rightly said the government aren't being transparent when it comes to crypto-currency and we can see that by the action on Binance exchange and their numerous attacks on Crypto-currency enthusiasts in general.

The requirements here aren't stringent to me and if this is how it would actually be then it's not bad but the issue here is trust no one would want to fall in as the scape goat to see what the government would do to that person but honestly it would be great if Nigeria gets an exchange by Nigerian this is an area that would create job opportunities and expand crypto adoption in the country.

Yeah you are right however if you follow the law stated and register your crypto company probably Nigeria government won't bother you, they may later make some changes in there law about crypto follow that new law.
Binance was accused of tax evasion offences, money laundering etc.
I'm not sure of this accusations however regarding tax evasion yeah that one is true binance was not paying tax to Nigeria government but they were making huge amount of money in Nigeria.
Some foreign companies disobey Nigeria law's they sometimes don't follow the lay down rules and regulations and they take advantage of it.
If any exchange follows the regulations that is in place they will operate without any interference and make profit because Nigeria citizens are well into cryptocurrency.

The laws concerning crypto for Naija no too dey clear, the other time no be government dey warn banks make dem no dey involved in any form with crypto transactions, banks like Opay, Palmpay, etc, even put up warning on their platform say dem fit seize your money if dem find out say e get connection with crypto.

If government wan make exchanges come register under the appropriate body, then make dem dey open to the industry, no be by locking up Binance representative for months, before finally releasing him few weeks ago. I don't think too many exchanges go register nor follow this guideline.

The Nigeria Securities and Exchange Commission (“SEC”) by a press release issued on August 29, 2024, announced that it has granted two Digital Asset Exchanges an “Approval in Principle” under the Accelerated Regulatory Incubation Program (“ARIP”). The framework for ARIP was introduced by SEC in June 2024 (see our previous newsletter for details) for the purpose of onboarding virtual asset exchange companies.

With this new update there is more clarity on the regulatory requirements for companies wishing to provide crypto trading services in Nigeria.  In view of the forgoing we have set out guidelines for companies wishing to provide crypto trading services in Nigeria.

1. Are all Crypto Trading Companies Required to Register with SEC?

Yes, all digital exchanges and platforms wishing to provide crypto trading services in Nigeria are required to register under ARIP and obtain the approval of SEC in order to provide such services in Nigeria.

2. What Approval will be Issued by SEC to Qualified Companies.

Upon undergoing registration under ARIP, an Approval in Principle will be granted to eligible companies. Once the condition for the Approval in Principle given by SEC has been satisfied by the company, the company will then be given full registration by SEC.

3. Is the Company required to be Incorporated in Nigeria?

Yes, all companies wishing to provide crypto trading services must be registered with the Corporate Affairs Commission (CAC). The Certificate of Incorporation is one of the documents that is required to be shown for registration under the ARIP.

4. Registration Requirements

According to the rules set by SEC, digital asset exchanges specifically are required to have a minimum paid-up capital of 500 million naira and must maintain a fidelity bond covering 25% of the paid-up capital of the company. Additionally, the Chief Executive officer and other principal officers of the company must possess relevant university degrees and at least five years of cognate experience. Furthermore, digital asset exchanges must obtain a “No Objection” letter from SEC before commencing its operations and trading any virtual or digital assets.

5. Do these rules apply to Foreign Business wishing to

operate Crypto Trading Companies in Nigeria?
Yes, these rules apply to foreign companies wishing to provide crypto trading services in Nigeria including incorporating a company with the CAC for the purpose of providing the services.


As the market for digital assets continues to grow, businesses interested in entering this space must ensure full compliance with the regulatory requirements set out by SEC and other relevant authorities.

We advise that companies wishing to provide crypto trading  services work closely with their legal advisors to ensure that they successfully operate within the confines of the relevant regulations.

Source.
https://pavestoneslegal.com/operating-a-crypto-trading-company-in-nigeria-regulatory-requirements/#:~:text=Yes%2C%20all%20digital%20exchanges%20and,provide%20such%20services%20in%20Nigeria.