Recent SEC's ₦2 Billion on Exchanges: Hope Your Naija Exchange Is Not Affected?

[Call_Me_Guru]

As we were still trying to wrap our heads around the new crypto tax and bad happenings in Nigeria, the SEC announced an increase in the entry fee to register into the Nigerian Crypto Industry. As someone who watches the crypto regulatory activities closely, I think we need to talk about what this means for our coins.

I would like us to consider these two facts:

1. The ₦2 Billion will build constraints
The SEC just released a circular last week raising the capital base for Digital Asset Exchanges (DAXs) to ₦2 Billion. For smaller Ancillary providers, the requirement has increased to ₦300 Million. These monies are big.

Why we should not take it lightly: This is a huge raise of about 4 times from the former amount (₦500 Million). We all know what a high raise in the minimum capital like this does to ecosystems. Some exchanges will liquidate or merge with other ones or be sold to bigger ones. This calls for the alert on the financial health of the ones we use.

2. The June 2027 is nearer than thought
The SEC has mandated every platforms to meet this target until June 30, 2027 deadline. Don't think this is a long time, we know that time flies, let's start acting now.

Let's consider this effect:

• Some exchanges will go bankruptcy and some potential startups will avoid the industry due to the huge ₦2 billion requirement. Don't forget, exchanges are not insured in Nigeria.
• If we are not smart, we might fund their licenses. The current exchanges could raise the capital or reimburse themselves before the time through insane fees, unethical practices and even account blocking, which is not new, but might increase.
• But the good side is that the industry will be strengthened.

What the regulators are doing is fine and very positive, they are trying to strengthen the crypto industry and make it more difficult for exchanges to collapse under their watch. However, my efforts for this thread is for awareness's sake and for action plans, if possible.

My advice to you guys

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• Diversify your crypto portfolio. Don't use a single exchange in Nigeria and consider self-custody approach. Offshore exchanges are also good options.
• Investigate about your exchanges to know if they are capable of the new standard. If you still want to keep them.
• Stay at alert and flee if you start hearing increasing cases of fraudulent acts from your local exchanges. Don't wait until it's your turn.

I hope this info helps!