Nigerian SEC Crypto Licensing Requirements for Exchanges: What You Need to Know in 2025

If you're running or planning to launch a cryptocurrency exchange in Nigeria, you can't afford to ignore the Nigerian SEC crypto licensing rules. The game changed in 2025 when President Bola Ahmed Tinubu signed the Investments and Securities Act 2025 into law. For the first time, digital assets are officially recognized as securities under Nigerian law-and the Securities and Exchange Commission (SEC) now has full power to regulate every crypto exchange operating in the country. This isn’t a suggestion. It’s the law. And if you’re not licensed, you’re operating illegally.

What Exactly Is a Digital Asset Exchange (DAX)?

A Digital Asset Exchange (DAX) is any platform that lets people buy, sell, or trade cryptocurrencies like Bitcoin, Ethereum, or stablecoins such as USDT. Under the new rules, if your platform connects buyers and sellers of digital assets-even if you don’t hold the coins yourself-you need a license. This includes peer-to-peer matching services, order book platforms, and even apps that let users convert crypto to Naira instantly. The SEC doesn’t care if you call it a wallet, a marketplace, or a trading bot. If it facilitates trades, it’s a DAX.

There’s no gray area here. Even foreign companies that target Nigerian users-through ads on Instagram, WhatsApp groups, or Nigerian-language websites-are required to get licensed. The SEC doesn’t care where your servers are. If Nigerians are using your service, you’re under their jurisdiction.

The Minimum Requirements to Apply

Getting licensed isn’t about filling out a form. It’s about proving you can operate safely, securely, and transparently. Here’s what the SEC demands before they even look at your application:

• ₦500 million in paid-up capital-that’s about $325,000 USD. You can hold this in cash, fixed assets like property, or quoted stocks, but you must prove the money is clean. The SEC will trace every naira back to its source.
• A fidelity bond of at least ₦125 million-this is insurance that covers losses if your company mismanages funds or gets hacked. It’s non-negotiable.
• Valid corporate documents-you need your Certificate of Incorporation from the Corporate Affairs Commission (CAC), your Memorandum and Articles of Association (MEMART), and forms CAC 1.1 and Form 7. Your MEMART must explicitly state that your business is a cryptocurrency exchange. Generic descriptions won’t cut it.
• Audited financial statements-if you’re a new company, you must submit a statement of affairs. If you’ve been around, you need full audits from a registered Nigerian auditor.

These aren’t suggestions. They’re hard gates. Skip one, and your application gets rejected without review.

The Accelerated Regulatory Incubation Programme (ARIP)

In June 2024, the SEC launched ARIP to speed up licensing for serious players. Before ARIP, companies waited months-or never got approved at all. Now, the process is faster, but still strict. Only two companies have received provisional licenses so far: Quidax and Busha. These two are now the only legal crypto exchanges in Nigeria with SEC backing.

SEC officials said in December 2024 that they plan to issue more provisional licenses “a lot quickly” in 2025. That’s not just marketing talk. They’re under pressure. Nigeria has one of the highest crypto adoption rates in Africa, with millions using digital assets to protect savings from inflation and bypass broken banking systems. The SEC can’t ignore that. But they also can’t let scams run wild.

Compliance: AML, KYC, and Transaction Monitoring

Once you’re licensed, the real work begins. You’re now on the hook for full Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) compliance. That means:

• Every customer must pass KYC-government-issued ID, proof of address, selfie verification. No exceptions.
• You must monitor all transactions for suspicious patterns-large transfers, rapid deposits and withdrawals, addresses linked to known scams.
• You must report any activity that looks like money laundering to the Financial Reporting Council (FRC), even if the user is a long-time client.

And yes, the SEC is watching your users’ transactions for tax purposes. They’re working with the Federal Inland Revenue Service (FIRS) to track crypto gains. If you’re trading Bitcoin and making profits, you’re liable for capital gains tax. The SEC’s goal? Make it impossible to hide crypto income.

What You Can’t Do (Even If You’re Licensed)

Having a license doesn’t mean you can do whatever you want. The SEC laid out clear red lines:

• No lending or financial help-you can’t give users loans to buy crypto, offer margin trading, or encourage them to borrow money to trade on your platform. That’s considered financial assistance-and it’s banned.
• No listing without approval-you can’t just add any new token to your exchange. Every single digital asset you want to list must get prior written approval from the SEC. This stops rug pulls and fake meme coins from flooding the market.
• No insider trading-employees, officers, and even family members can’t use their position to trade ahead of public announcements. The SEC will audit internal trading logs.

Violating any of these rules can lead to immediate suspension, fines up to ₦1 billion, or even criminal charges.

Why This Matters for Nigerian Crypto Users

For regular users, this shift means more safety-but also more friction. Before, you could trade crypto on P2P platforms like LocalBitcoins or Telegram groups with zero verification. Now, you’ll need to submit your ID, wait for approval, and face limits on how much you can trade in a day. It’s slower. It’s more paperwork. But it’s also safer.

A 2024 survey by Busha found that nearly half of Nigerian crypto users avoid the market because they fear scams and hacks. The SEC’s rules directly target those fears. Licensed exchanges now have insurance, audits, and real oversight. If your funds are stolen from a licensed platform, you have legal recourse. That wasn’t true before.

But there’s a trade-off. Cross-border payments that used to take minutes via P2P now take days due to stricter AML checks. Small businesses that relied on crypto for fast international payments are feeling the squeeze. The SEC knows this. They’re working on solutions-but for now, compliance comes first.

What’s Next in 2025?

The SEC is already looking ahead. They’re finalizing rules on crypto taxation, which could mean mandatory reporting of capital gains for all licensed exchanges. They’re also exploring ways to let Nigerians trade international tokens like Solana or Cardano under SEC supervision-something that’s currently blocked.

There’s also talk of creating a “white list” of approved tokens-similar to how stock exchanges list only qualified companies. That could help weed out the 90% of crypto projects that are scams.

One thing’s clear: Nigeria is moving from a Wild West crypto market to a regulated financial ecosystem. The goal isn’t to kill crypto-it’s to protect people who use it. And if you’re serious about operating here, you have to play by the new rules.

Who Should Apply for a License?

If you’re a startup with less than ₦500 million in capital? Wait. Build your business model, get funding, and come back when you’re ready. The SEC isn’t here to help you bootstrap.

If you’re a foreign exchange targeting Nigerians? You have two choices: get licensed or shut down your Nigerian operations. There’s no third option. The SEC has already started blocking websites and apps that don’t comply.

If you’re a Nigerian entrepreneur with the capital, tech team, and compliance mindset? This is your moment. The market is open. Only a handful of players are licensed. The rest are still operating in the shadows. You could be one of the first to build a trusted, legal, and scalable crypto business in Africa’s largest economy.