New draft rules set capital thresholds, supervisory charges and investment limits for Nigeria’s digital asset industry.
Nigeria’s Securities and Exchange Commission (SEC) has proposed significantly higher financial requirements for companies seeking to operate digital asset exchanges and custodial services in the country, including a N30 million registration fee and a minimum paid-up capital of N2 billion for key operators.
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 digital asset market.
Under the proposed framework, digital asset exchanges (DAXs), digital asset custodians (DACs), digital asset platform operators (DAPOs), digital asset offering platforms (DAOPs) and real-world asset tokenisation platforms (RATOPs) would each be required to pay a N30 million registration fee.
However, the capital requirements would differ depending on the nature of the business.
Digital asset exchanges and custodians would face the highest threshold, with each required to maintain a minimum capital of N2 billion. DAPOs, DAOPs and RATOPs, meanwhile, would be required to maintain minimum capital of N500 million each.
For virtual asset service providers (VASPs), the SEC proposed a minimum capital requirement of N200 million. Applicants in this category would also be required to pay a N100,000 processing fee and a N300,000 application fee.
Insurance requirement
Beyond registration fees and capital thresholds, the commission proposed additional financial safeguards for regulated operators.
Entities operating under the framework would be required to maintain a fidelity insurance bond equivalent to at least 25 per cent of their minimum paid-up capital.
The requirement is designed to provide an additional layer of protection against certain risks associated with the operation and custody of digital assets.
The draft rules also provide for operators participating in the SEC’s Accelerated Regulatory Incubation Programme (ARIP) to pay a N200,000 initial assessment fee and a N2 million application fee.
SEC introduces turnover-based charges
The proposed regulatory regime would also impose continuing supervisory fees based on the turnover of regulated entities.
During the ARIP phase, digital asset exchanges would pay a supervisory fee of 0.015 per cent of adjusted turnover, while other participating entities would pay 0.0075 per cent.
Once fully registered, the charges would increase.
A fully registered digital asset exchange would be required to pay 0.025 per cent of adjusted turnover, while other regulated entities would pay 0.015 per cent.
According to the SEC, a fully registered digital asset exchange “shall pay a supervisory fee of 0.025% of adjusted turnover, payable quarterly or at such frequency as may be prescribed by the Commission.”
The commission further stated that other regulated entities would pay a supervisory fee of 0.015 per cent of adjusted turnover, also payable quarterly or at any other frequency it may prescribe.
The turnover-based structure means that regulatory costs would increase alongside the scale of an operator’s business, rather than relying solely on fixed registration and licensing charges.
Proposed limits on retail investors
The SEC has also proposed restrictions on how much individual retail investors can commit to digital asset offerings.
Under the draft rules, a retail investor would generally be prohibited from investing more than N1 million per issuer or N10 million in aggregate across digital asset offerings during any 12-month period, unless the commission determines otherwise.
The framework would impose additional obligations on platforms where an investor seeks to commit more than N1 million or five per cent of the investor’s net worth, whichever is higher.
Before accepting such an investment, the platform would have to provide the investor with a prominent warning outlining the risks associated with the transaction.
The investor would also have to give express consent to proceed and confirm that they understand the nature of the investment and the material risks involved.
In addition, the platform would be required to determine whether the proposed investment was appropriate for the individual.
That assessment would take into consideration the investor’s knowledge, experience, financial circumstances and ability to withstand potential losses.
The proposed measures indicate a broader effort by the SEC to impose stronger entry requirements and investor-protection safeguards on Nigeria’s digital asset sector.
If adopted, the rules would establish a more structured regulatory framework covering exchanges, custodians, virtual asset service providers, tokenisation platforms and other businesses involved in the issuance, offering and trading of digital assets.