The Securities and Exchange Commission (SEC) is implementing new regulations to ensure cryptocurrency transactions on regulated exchanges fall within the tax framework. This move aligns with the government’s plan to increase tax revenue from the rapidly growing crypto industry.
SEC’s Plan for Crypto Taxation
According to a Bloomberg report, the SEC confirmed in an email response that these rules aim to capture tax revenue from cryptocurrency transactions. Digital assets have become popular in Nigeria, especially among the youth and tech-savvy investors.
The SEC acknowledged the significant tax revenue potential but did not specify expected figures. However, the goal is clear: to formalize cryptocurrency transactions within Nigeria’s tax system.
Growth of Crypto Trading in Nigeria
Cryptocurrency adoption has surged in Nigeria. Many investors see digital assets as a hedge against inflation and the depreciation of the naira against the US dollar. Since mid-2023, the local currency has faced a sharp decline, making crypto an attractive alternative.
To regulate this market, the SEC is expanding its licensing scope. New permits will allow residents to trade on centralized exchanges, ensuring better transaction monitoring and tax compliance.
“We anticipate gradual traction toward centralized exchanges because they will provide greater protections and comfort for investors,” the SEC stated.
Proposed Crypto Transaction Bill
A bill introducing a framework for taxing crypto transactions is currently under review by the National Assembly. It is expected to be passed into law within this quarter. This initiative aligns with President Bola Tinubu’s fiscal reforms aimed at increasing government revenue and reducing the budget deficit.
Since assuming office in 2023, Tinubu has prioritized tax administration reforms to improve Nigeria’s financial sustainability. Last week, lawmakers approved a 2025 spending plan of N54.99 trillion ($36.4 billion), reinforcing the government’s commitment to revenue generation.
Recent SEC Approvals for Crypto Exchanges
In August, the SEC granted an Approval-in-Principle to two cryptocurrency exchanges, Quidax and Busha. These approvals signify the regulator’s readiness to oversee the crypto industry under the Accelerated Regulatory Incubation Program (ARIP).
Additionally, four digital asset firms have been admitted to the Regulatory Incubation (RI) Program. These platforms—Trovotech Ltd, Wrapped CBDC Ltd, Dream City Capital, and HousingExchange.NG Ltd—are testing their models and technology under SEC supervision.
The SEC emphasized that other applications are being assessed. Entities meeting all regulatory requirements will receive Approval-in-Principle on a case-by-case basis.
