The Securities and Exchange Commission (SEC) has proposed sweeping new financial and regulatory requirements for digital asset operators in Nigeria, including a ₦30 million registration fee and minimum capital of up to ₦2 billion for cryptocurrency exchanges and custodians.

The proposals are contained in the commission’s draft rules on Digital and Virtual Asset Operations, Custody and Markets, released on August 20, as the regulator moves to strengthen oversight of Nigeria’s rapidly expanding cryptocurrency industry.

Under the proposed framework, digital asset exchanges, custodians, platform operators, digital asset offering platforms and real-world asset tokenisation platforms would each pay a ₦30 million registration fee.

The proposed minimum capital requirements vary according to the category of operator.

Digital asset exchanges and custodians would each be required to maintain ₦2 billion in minimum capital, while digital asset platform operators, digital asset offering platforms and real-world asset tokenisation platforms would require ₦500 million each.

Virtual asset service providers would face a minimum capital requirement of ₦200 million, alongside a ₦100,000 processing fee and ₦300,000 application fee.

The SEC also proposed that regulated entities maintain a fidelity insurance bond covering at least 25 per cent of their minimum paid-up capital.

SEC tightens entry requirements

The proposed framework could significantly raise the cost of entry into Nigeria’s digital asset market, particularly for smaller operators and emerging cryptocurrency businesses.

Companies seeking to operate under the SEC’s Accelerated Regulatory Incubation Programme would also face additional charges, including a ₦200,000 initial assessment fee and ₦2 million application fee.

The commission further proposed ongoing supervisory charges linked to the turnover of regulated entities.

Under the incubation programme, a digital asset exchange would pay 0.015 per cent of adjusted turnover, while other regulated entities would pay 0.0075 per cent.

Following full registration, the supervisory fee would increase to 0.025 per cent of adjusted turnover for digital asset exchanges and 0.015 per cent for other regulated entities, payable quarterly or at intervals determined by the commission.

The measures signal a shift towards a more tightly supervised digital asset market, with operators expected to meet higher capital, governance and compliance standards before accessing Nigerian customers.

Retail investors face tighter limits

Beyond regulating operators, the SEC is proposing restrictions on the amount retail investors can commit to digital asset offerings.

Under the draft rules, a retail investor would not be permitted to invest more than ₦1 million in a single issuer or ₦10 million across digital asset offerings within a 12-month period.

Investors seeking to commit more than ₦1 million or five per cent of their net worth, whichever is higher, would face additional safeguards.

The digital asset offering platform would be required to issue a prominent risk warning, obtain the investor’s express consent and confirm that the investor understands the nature and risks of the investment.

Platforms would also have to assess an investor’s knowledge, experience, financial position and ability to absorb potential losses before accepting the investment.

They would be required to maintain records of the warnings, investor consent and assessments, while establishing systems to monitor and enforce the prescribed investment limits.

Institutional, qualified and high-net-worth investors, as well as other categories recognised by the commission, could be exempted from the proposed restrictions.

Foreign operators targeted

The proposed rules also extend the SEC’s regulatory reach to companies outside Nigeria.

No person or company would be permitted to conduct digital or virtual asset business in Nigeria or specifically target Nigerian residents without obtaining the required registration, approval or authorisation from the commission.

Foreign stablecoin issuers seeking access to the Nigerian market would face additional requirements, including the appointment of a local representative, evidence of authorisation in an acceptable foreign jurisdiction and compliance with Nigeria-specific requirements covering reserves, liquidity and redemption.

The commission also proposed mandatory participation in its Accelerated Regulatory Incubation Programme for companies seeking to operate in Nigeria’s cryptocurrency market.

Governance and compliance

Digital asset operators would additionally be required to comply with Nigeria’s corporate governance code and other governance standards prescribed by the SEC.

The broader objective is to ensure that businesses operating in the sector have sufficient financial capacity, appropriate governance structures and mechanisms to protect investors from excessive risks.

If adopted, the proposed framework would represent one of the most significant tightening of regulatory requirements for Nigeria’s digital asset industry, potentially reshaping the market by favouring better-capitalised operators.

For smaller firms, however, the higher capital thresholds and multiple regulatory charges could increase operating costs and make market entry significantly more difficult.

The proposals remain subject to the SEC’s regulatory process and could be amended before final adoption.

The emerging debate will therefore centre on whether the tougher requirements will create a safer and more credible digital asset market or drive smaller operators and investors towards less-regulated offshore platforms.