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Nigeria’s Securities and Exchange Commission (SEC) has proposed a new regulatory framework that would give the regulator broader oversight of digital and virtual asset businesses, including greater access to transaction, wallet, custody and cross-border movement data.
The proposed rules would require cryptocurrency exchanges, custodians, virtual asset service providers (VASPs) and other digital asset businesses targeting Nigerian users to register with the SEC, including operators based outside the country.
The framework covers a wider range of activities, including digital asset exchanges, tokenisation platforms, digital asset offerings and other virtual asset services.
The proposed regulations represent a shift towards more comprehensive regulatory monitoring and compliance management of Nigeria’s digital asset market, with transaction visibility emerging as a major focus of the SEC’s supervisory approach.
SEC seeks deeper access to crypto transaction data
Under the proposed framework, the SEC could require regulated digital asset firms to provide application programming interface (API)-based or other electronic access to operational, transactional, financial, wallet, custody and settlement information.
Operators would also be required to identify and report transactions involving Nigerian residents and cross-border transfers.
The information could include wallet addresses, transaction values, timestamps and counterparty details, giving the regulator greater visibility into the movement of digital assets within and across Nigeria’s financial system.
The SEC said it could reject an application where it is not satisfied with an applicant’s information, ownership structure, governance, financial position, operating model, technology, risk controls, compliance arrangements or ability to meet regulatory requirements.
Higher capital requirements for crypto operators
The proposed framework would also introduce significant minimum capital requirements across different categories of virtual asset businesses.
Digital asset exchanges and custodians would each be required to maintain minimum capital of ₦2 billion, while other VASPs would require ₦200 million.
Digital asset platform operators, including token issuers, digital asset offering platforms and real-world asset tokenisation platforms, would be subject to a ₦500 million minimum capital requirement.
The proposed rules also set registration fees of ₦30 million for digital asset exchanges and ₦15 million for VASPs.
One notable change is the removal of ancillary virtual asset providers (AVASPs) from the proposed framework. The category had previously been subject to a minimum capital requirement under the SEC’s earlier guidelines.
Stronger controls for customer assets
The SEC is also proposing stricter safeguards around customer assets held by digital asset exchanges and other regulated operators.
Under the proposed framework, customer assets would be required to remain separate from an operator’s corporate funds. Related-party custody arrangements would also be subject to additional requirements, including the use of a separately incorporated and regulated custodian.
The framework extends beyond traditional exchange and custody activities, with provisions addressing emerging digital asset models such as staking, lending, yield products, liquidity pools, peer-to-peer (P2P) trading, over-the-counter (OTC) transactions and non-custodial wallet services.
ARIP moves towards stronger supervision
The proposed rules follow the SEC’s efforts to bring more virtual asset businesses into its Accelerated Regulatory Incubation Programme (ARIP).
The Commission has continued admitting digital asset firms into the programme as it develops its supervisory framework for the sector.
Under the proposed regulations, an ARIP approval-in-principle would remain valid for two years. However, such approval would not constitute full registration and would limit the scope of activities an operator could undertake while subjecting it to enhanced regulatory supervision.
The proposed framework therefore signals a move towards a more structured regulatory regime for Nigeria’s digital asset industry, combining higher financial requirements with stronger transaction monitoring, risk management, governance and regulatory reporting obligations.
For crypto businesses, the changes could increase compliance and operational requirements. For the SEC, they would provide greater visibility into how digital assets are traded, held and transferred, particularly where transactions involve Nigerian residents or cross-border flows.
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