Cryptocurrency exchanges like Binance, Quidax, amongst others would be charged about N30.5 million by Nigeria’s Securities and Exchange Commission (SEC) to operate within the country.
SEC introduced the fee following an update in its guidelines on digital asset operation in Nigeria, which was released on Sunday by the capital market regulator.
The guidelines cover activities of Digital Asset Offering Platforms (DAOPs), Digital Asset Custodians (DACs), Virtual Assets Service Providers (VASPs), and Digital Assets Exchange (DAX).
This comes amid the restriction placed on cryptocurrency transactions in Nigeria by the Central Bank of Nigeria (CBN), which Ripples Nigeria reported in February 2021 – banks are ordered to close accounts transacting digital assets, excluding eNaira.
According to the SEC guidelines, the companies offering the sale of digital tokens that are considered securities must register with the regulator, and their application would be reviewed within 30 days to determine if the digital assets are worthy of being classified as security (assets).
SEC requires fees for cryptocurrency exchanges in Nigeria
There are several digital assets operators in Nigeria, from Binance to Quidax, Paxful, Buycoins, Remitano and NairaEx, and for such platforms to continue operation, they must have N500 million paid-up capital (money received in exchange for the digital assets) as evidence.
Digital currency platforms are also required to provide a fidelity bond (an insurance that protects investors from losses caused by fraudulent acts), which shows about 25 percent of the minimum paid-up capital is protected.
Aside from the aforementioned requirements, they are only allowed to raise N10 billion from digital assets exchanged for investors money, which means there’s a ceiling on their trading height, but SEC stated that the ceiling would be reviewed occasionally.
Meanwhile, to register as a DAOP, applicants are directed to obtain application form which costs N100,000, to process the application, SEC will charge N300,000, the sponsor of the DAOP would pay up N100,000, with registration fee placed at N30 million.
Commenting on possible rejection, SEC stated, “The commission may reject any application for registration of digital assets if, in its opinion, the proposed activity infringes public policy, is injurious to investors or violates any of the laws, rules and regulations implemented by the commission.”
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