Nigeria SEC proposes new crypto regulations and capital requirements

The Securities and Exchange Commission (SEC) of Nigeria has proposed a new regulatory framework for the country’s digital asset industry. The proposed Rules on Digital and Virtual Asset Operations, Custody and Markets introduce significant financial requirements for various operators, including Digital Asset Exchanges (DAXs) and Digital Asset Custodians (DACs), which would each be required to maintain a minimum capital of N2 billion.

Other entities, such as Digital Asset Platform Operators (DAPOs), Digital Asset Offering Platforms (DAOPs), and Real World Asset Tokenisation Platforms (RATOPs), would face a minimum capital requirement of N500 million. Virtual Asset Service Providers (VASPs) would need to maintain N200 million. Additionally, the SEC proposes a N30 million registration fee for these operators, alongside a requirement to maintain a fidelity insurance bond equivalent to at least 25 per cent of their minimum paid-up capital.

To enhance investor protection, the SEC has also proposed limits for retail investors. Under the proposal, a retail investor would be restricted from investing more than N1 million per issuer and a total of N10 million across all digital asset offerings within any twelve-month period. If an investor seeks to exceed N1 million or 5 per cent of their net worth, platforms must provide risk warnings, obtain express consent, and assess the investor’s financial capacity to bear losses.