Nigeria SEC Crypto Exchange Licensing Requirements 2025

Want to run a crypto exchange in Nigeria? You’ll need the green light from the Nigerian Securities and Exchange Commission (SEC), the regulator that now treats digital tokens as securities under the Investments and Securities Act 2025. The new rules are a big shift from the wild‑west peer‑to‑peer scene that dominated for years. Below you’ll find everything you must line up - from capital to compliance - so you can move from idea to a fully licensed Digital Asset Exchange (DAX) without hitting a surprise roadblock.

TL;DR - Quick Takeaways

• Register as a Digital Asset Exchange (DAX) with the SEC under the Investments and Securities Act 2025.
• Minimum paid‑up capital: ₦500million (≈ $325k) plus a fidelity bond of at least 25% of that amount.
• Submit full corporate documents - CAC certificate, MEMART, audited statements, and proof of fund sources.
• Implement AML/KYC controls that follow Central Bank of Nigeria (CBN) guidance.
• Join the Accelerated Regulatory Incubation Programme (ARIP) for faster provisional licensing.

1. The Legal Backbone - Investments and Securities Act 2025

The Investments and Securities Act (ISA)2025, signed by President Bola Ahmed Tinubu, is the cornerstone of Nigeria’s crypto oversight. It reclassifies most digital tokens as securities, giving the SEC authority over issuance, offering platforms, and custody of digital assets. This replaces the outdated ISA2007 and clears the legal fog that many startups struggled with.

Key provisions you’ll encounter:

• All crypto‑related service providers must be licensed by the SEC.
• SEC can issue, amend, or revoke licenses based on compliance performance.
• Regulatory sandboxes and the ARIP are built into the Act to nurture innovation while protecting investors.

2. Becoming a Digital Asset Exchange (DAX)

The SEC’s Digital Asset Exchange (DAX) registration is the first formal step. The application packet is massive, but the checklist below keeps you on track.

3. Capital and Bond - Why the Numbers Matter

SEC wants to make sure a DAX can survive market shocks and cover user losses. That’s why the ₦500million floor is non‑negotiable. The capital can sit in a local bank, be invested in listed securities, or held as fixed assets - but every line must be traceable. The fidelity bond acts like an insurance policy; if the exchange defaults, the bond can be tapped to reimburse affected users.

Practical tip: many startups fund the capital through venture capital (VC) round‑ups. SEC will ask for a source‑of‑funds declaration, so have your term sheets and investor KYC ready before you file.

4. Documentation Checklist - From CAC to Audits

Here’s the paperwork you’ll submit to the SEC portal (which also hosts the ARIP fast‑track option):

1. Certificate of Incorporation (CAC Form1.1)
2. Memorandum & Articles of Association (include crypto‑exchange clause)
3. Form7 - particulars of directors and shareholders
4. Audited financial statements (or statement of affairs for brand‑new firms)
5. Paid‑up capital verification (bank letter, asset appraisal)
6. Fidelity bond certificate
7. AML/CFT policy, KYC workflow, transaction‑monitoring plan
8. Technology audit report (security penetration test, wallet segregation proof)
9. Risk‑management and governance charter

Missing any of these will delay the review by weeks, or even months.

5. Accelerated Regulatory Incubation Programme (ARIP)

Launched in June2024, ARIP is the SEC’s answer to the “regulatory uncertainty” complaint that haunted early‑stage crypto firms. Under ARIP you submit a provisional application, get a fast‑track review, and receive a temporary operating licence while the full dossier is vetted.

Only two firms - Quidax and Busha - have cleared the ARIP gate so far. The programme gives you:

• 90‑day provisional licence (vs. the usual 180‑day timeline)
• Dedicated SEC liaison for rapid question resolution
• Eligibility for sandbox testing of new token listings

If you’re a startup with a lean team, ARIP is the fastest route to market. Just remember the provisional licence still requires you to meet the full capital and bond thresholds.

6. AML, CFT, and KYC - The Compliance Heavy‑Lifting

SEC leans on the Central Bank of Nigeria (CBN) for AML/CFT standards, but it expects crypto firms to go beyond basic checks. Your compliance stack should include:

• Customer Identification: Full name, government ID, address, and biometric verification where possible.
• Enhanced Due Diligence for politically exposed persons (PEPs) and high‑value accounts (transactions > ₦5million).
• Ongoing Monitoring: Automated alerts for rapid‑movement wallets, mixing services, or transactions to high‑risk jurisdictions.
• Record‑Keeping: Retain all KYC and transaction logs for at least five years, accessible for SEC audits.

Failure to meet these standards can trigger fines up to ₦10million per breach, plus possible licence suspension.

7. Operational Restrictions You Can’t Ignore

SEC’s rules draw hard lines around a few risky practices:

• No financial assistance to users for buying or trading crypto on your platform - meaning you can’t offer credit, loans, or “buy‑now‑pay‑later” schemes.
• No‑Objection Rules - before adding a new token to your order book, you must get SEC clearance. This prevents the flood of meme‑coin scams that plagued the P2P market.
• Foreign operator compliance - even if you’re incorporated abroad, targeting Nigerian users (ads, emails, local agents) subjects you to the same licensing regime.

These restrictions aim to protect investors, but they also mean you need a dedicated compliance team that can file “no‑objection” requests quickly.

8. Penalties and Enforcement - What’s at Stake?

SEC has beefed up its enforcement toolbox. Typical penalties include:

• Fines ranging from ₦5million to ₦100million for AML breaches.
• Immediate suspension or revocation of the DAX licence for repeated violations.
• Criminal prosecution for operators of Ponzi schemes or fraudulent token listings.

Because the market still sees a lot of rug‑pulls and meme‑coin scams, the regulator is especially vigilant about token‑listing approvals.

9. Real‑World Example: How Quidax Got Its Provisional Licence

Quidax applied through ARIP in early 2024. Their key moves:

1. Raised ₦600million from a local VC, fully documented source‑of‑funds.
2. Secured a ₦150million fidelity bond right away.
3. Uploaded a complete AML/KYC SOP that referenced CBN’s latest circular.
4. Submitted a third‑party security audit from a recognized firm (SecureHash).
5. Filed a “no‑objection” request for its initial 12‑token lineup, all of which got quick SEC approval.

The result? A 90‑day provisional licence, allowing Quidax to launch a beta platform while the full application was under review. Their experience shows that prep work pays off big time.

10. Next Steps - From Planning to Launch

Ready to get moving? Follow this practical roadmap:

1. Assess Capital - Confirm you have ₦500million plus bond coverage.
2. Choose a Legal Structure - Register with CAC, update MEMART with crypto purpose.
3. Build Compliance - Draft AML/KYC policies, set up monitoring tools, train staff.
4. Tech Stack - Develop a secure matching engine, integrate cold‑wallet custody, obtain a security audit.
5. Prepare Documentation - Gather all forms, financial statements, bond certificates.
6. Apply via ARIP (if eligible) - Submit provisional application for faster turnaround.
7. Secure No‑Objection for Tokens - Submit listing requests before going live.
8. Launch Beta - Operate under provisional licence, collect user feedback.
9. Complete Full Licence - Address any SEC comments, submit final documents, obtain full DAX licence.

Stick to the checklist, keep communication lines open with your SEC liaison, and you’ll be trading crypto legally in Nigeria within months, not years.

Frequently Asked Questions

Do I need a local office in Nigeria to get a DAX licence?

Yes. The SEC requires a physical presence - a registered office address and at least one resident director - to verify jurisdiction and enforce compliance.

Can a foreign exchange partner with a Nigerian entity to avoid licensing?

No. If the foreign platform targets Nigerian users (ads, emails, local agents), it must obtain the SEC licence itself or operate through a fully licensed Nigerian partner.

What happens if I list a token without SEC approval?

The SEC can issue an immediate cease‑and‑desist order, impose fines, and potentially suspend your licence. Re‑listing after approval is mandatory.

Is the ARIP programme available to all crypto startups?

ARIP is open to any Nigerian‑registered entity that meets the minimum capital and documentation standards. Preference is given to firms with clear AML/KYC frameworks and vetted technology stacks.

How long does the full licensing process take after I submit all documents?

The SEC aims for a 180‑day review period. With a clean dossier and active communication, many applicants report an average of 150days.