Dozens of other startups remain in limbo. Notably, a similar effort in South Africa, another African crypto hub, yielded 59 operating licenses in April 2024, highlighting contrasting momentum.<\/p>\n
This misalignment creates a practical dilemma for businesses. Regulators state that failure to pay tax can lead to license withdrawal, but most firms cannot secure a license in the first place. Alabi explains that for platforms, true \u201ccompliance\u201d now requires navigating two parallel tracks.<\/p>\n
On one track is tax compliance, he notes, which entails registering with authorities and building systems to produce audit-ready reports that map customer gains to naira values. On the other is regulatory readiness, which he explained as demonstrating progress in the SEC\u2019s onboarding pipeline and maintaining robust internal controls, even while a full license remains out of reach.<\/p>\n
For the average user, Alabi says compliance is \u201cpractical and boring.\u201d It means keeping basic records of transactions and using platforms that can provide formal statements. \u201cThe key point,\u201d he stresses, \u201cuser response will be driven less by the existence of tax and more by the\u00a0usability\u00a0of tax compliance. If filing and record keeping feel impossible, activity will not disappear; it will move.\u201d<\/p>\n
A Pattern of Enforcement Before Clarity<\/p>\n Nigeria\u2019s relationship with cryptocurrency has been a rollercoaster of harsh crackdowns and tentative acceptance. In 2021, the Central Bank of Nigeria (CBN) banned banks from servicing crypto exchanges, only to reverse the policy in late 2023.<\/p>\n The most dramatic enforcement action came in early 2024. Nigerian authorities detained two Binance executives<\/a> for months, accusing the global exchange of manipulating the naira\u2019s value and facilitating illicit flows. The government also directed telecom providers to block access to Binance and other major platforms.<\/p>\n These blocks remain partly in place today, creating a contradictory landscape where the state simultaneously pursues taxes from an industry it actively restricts. This top-down approach has defined Nigeria\u2019s strategy. The SEC has proposed a NGN 1 B (~USD 700 K) capital requirement for VASPs, a sum critics call prohibitive.<\/p>\n For operators, the core complaint is sequencing. The tax law explicitly states that failure to comply can lead to license revocation. But for the majority of companies still awaiting approval, this threat feels abstract.<\/p>\n \u201cHow will they implement the tax regime coming next year without proper operator licences when only two exchange platforms are licenced?\u201d financial analyst Rume Ophi asked<\/a> in November.<\/p>\n Nevertheless, the responsibility for reporting and enforcement will fall heavily on the exchanges. They are required to maintain seven years of customer transaction records, report suspicious activity, and provide periodic customer reports to the tax authority. However, without a clear, accelerated pathway to licensing, critics fear the state lacks the structured mechanism to verify these obligations at scale.<\/p>\n What Comes Next?<\/p>\n
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