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With the licensing requirement in vogue, local exchanges may either have to merge with the others or quit operation entirely.

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Nigerian crypto analyst Rume Ophi suggests that the Nigerian Securities and Exchange Commission (SEC) should review its crypto licensing requirements, particularly the guidelines for virtual asset services providers (VASPs). This revision would facilitate the issuance of licenses to local cryptocurrency exchanges for operating within the country.

Ophi, in an interview, highlighted that the current SEC guidelines for registering VASPs are disadvantageous to local crypto exchanges. He emphasized that indigenous exchanges should have been prioritized during the formulation of these guidelines. To secure a VASP license from the SEC, exchanges must adhere to the application processing requirements, pay a registration fee, and fulfill other relevant fees.

Ophi pointed out that numerous local exchanges are unable to meet the minimum upfront capital requirement of 500 million naira ($556,620). Consequently, he noted that this stipulation would lead to predominantly foreign exchanges operating in Nigeria, rather than achieving a diverse and balanced ecosystem.

Ophi further noted that the National Assembly of Nigeria needs to get involved to ensure that the SEC’s licensing requirements are in line with the current realities of the country’s economy.

Supporting Ophi’s perspective, Kue Barinor Paul, a Nigerian Web3 legal representative, expressed during a X space conversation hosted by Ophi that Nigerian crypto exchanges and VASPs might need to consider merging in order to meet the SEC’s license requirement. 

Paul emphasized that the Nigerian SEC should reconsider the framework for license registration, as the existing requirements primarily favor foreign exchanges over local ones.

Paul said the Nigerian SEC needs to rework the framework for license registration as the current requirements are mainly friendly to foreign exchanges.Paul said the Nigerian 

SEC needs to rework the framework for license registration as the current requirements are mainly friendly to foreign exchanges.

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