Crypto exchanges face N10 million fine under new NRS tax rules

Virtual Asset Service Providers (VASPs), including cryptocurrency exchanges and peer to peer (P2P) marketplace operators, risk a N10 million penalty for failing to comply with Nigeria’s new tax obligations under the Nigeria Revenue Service (NRS) Guidelines on the Taxation of Virtual Assets.

The guidelines released on Monday provide the implementation framework for taxing virtual assets under the Nigeria Tax Administration Act, 2025.

It also imposes wide-ranging compliance obligations on operators in the sector, including tax registration, tax collection, reporting and customer verification requirements.

What the NRS is saying in the guidelines

Under the guideline, non-compliance by VASPs and P2P marketplace operators attracts a penalty of N10 million for the first month of default and N1 million for every subsequent month until the breach is remedied.

According to the guideline, VASPs are required to register with the NRS and ensure that every customer provides a valid Tax Identification Number (TIN) before an account can be activated.

The operators are also required to deduct applicable withholding taxes, collect Value Added Tax (VAT) and stamp duties where applicable, remit the taxes to the NRS within statutory timelines and file the necessary tax returns.

The framework further requires crypto exchanges to maintain adequate records of transactions and comply with reporting obligations prescribed under the Nigeria Tax Administration Act.

The NRS said the measures are aimed at improving tax compliance within Nigeria’s fast-growing virtual asset ecosystem while ensuring that digital asset transactions are brought within the country’s tax net.

• “The penalties set out in this paragraph apply to the defaults relating to compliance with these Guidelines and are without prejudice to the application of any other penalty, interest or offence prescribed under the NTAA or any other applicable law,” the NRS stated.

Get up to speed

The release of the guidelines comes two weeks after President Bola Tinubu signed an Executive Order on Virtual Assets Coordination, 2026, establishing a new framework to coordinate the regulation of virtual assets across government agencies as Nigeria seeks to curb fraud while supporting innovation in the digital economy.

The Executive Order, which took effect from July 17, 2026, creates a Virtual Asset Council chaired by the Central Bank of Nigeria (CBN) to harmonise oversight of cryptocurrencies, tokenised assets, stablecoins, and other digital assets without creating a new regulator.

According to the Presidency, the Executive Order responds to the growing complexity of virtual assets, which increasingly cut across the traditional boundaries of currencies, securities, commodities, and payment systems.

Penalties extend beyond exchanges

The guideline also prescribes penalties for taxpayers who fail to comply with registration requirements.

• Individuals and businesses engaging in virtual asset activities who fail to register for tax purposes will pay a penalty of N50,000 for the first month of default and N25,000 for each subsequent month until they comply.
• The new framework states that every person carrying on virtual asset transactions in Nigeria must register with the NRS and obtain a Tax Identification Number.
• The guidelines also clarify the tax treatment of a wide range of virtual asset transactions, including cryptocurrency trading, staking, mining, decentralized finance (DeFi) rewards, liquidity mining, airdrops, royalties and hard forks.

It also provides guidance on the valuation of virtual assets, tax treatment of cross border crypto payments, wallet to wallet transfers, stablecoins and wrapped digital assets.

The NRS said the guidelines are intended to provide certainty for taxpayers and operators while supporting effective implementation of the virtual asset taxation regime introduced under the Nigeria Tax Administration Act, 2025.

What you should know

The tax guidelines for virtual assets confirm the government’s readiness to extract value from the crypto industry as the Securities and Exchange Commission (SEC ) intensifies efforts at regulating the market.

Last month, Nairametrics reported that the SEC had admitted seven new companies into its Accelerated Regulatory Incubation Programme (ARIP), expanding the number of digital asset firms operating under its regulatory sandbox.

The seven companies include Bitbarter Technologies Limited, Luno Fintech Nigeria Limited, GetEquity Limited, Koinkoin Global Network Limited, Wrapped CBDC Ltd, Trovotech Ltd, and Blockvault Custodian Ltd.

The latest approval follows the SEC’s admission of Quidax and Busha into its regulatory framework in August 2024.