- SEC Guidelines Overhaul: Analysts advocate revisiting SEC guidelines to favor local crypto exchanges.
- Licensing Requirements: Existing guidelines pose challenges for Nigerian exchanges to obtain VASP licenses.
- Capital Barrier: High upfront capital requirement hinders local exchanges, favoring foreign counterparts.
- Call for Regulatory Review: Experts suggest the Nigerian SEC should adapt licensing framework for current economic conditions.
Licensing Challenges for Nigerian Crypto Exchanges:
The Nigerian Securities and Exchange Commission’s (SEC) crypto licensing requirements are under scrutiny as analysts call for a reassessment of the guidelines. Rume Ophi, a Nigerian crypto analyst, highlights concerns that the existing regulations favor foreign exchanges over indigenous platforms. The SEC’s virtual asset services providers (VASP) guidelines, meant to guide registration, are perceived as unfavorable to local exchanges. According to Ophi, the high upfront capital requirement of 500 million naira poses a significant barrier, potentially resulting in a dominance of foreign exchanges within the country.
Capital Barriers and Calls for Regulatory Review:
Ophi emphasizes that many local exchanges struggle to meet the minimum capital requirement, urging the SEC to consider the economic realities of Nigeria. Kue Barinor Paul, a Nigerian Web3 legal representative, echoes these sentiments, suggesting that local exchanges might need to merge to meet licensing requirements. The call for a regulatory review is reinforced, emphasizing the necessity for a framework that supports the growth of indigenous crypto exchanges. Experts argue that the National Assembly of Nigeria should play a role in ensuring the alignment of SEC licensing requirements with the country’s economic landscape.