Nigeria’s Securities and Exchange Commission has rolled out a new regulatory framework for digital and virtual assets. As a result, crypto founders are worried it could squeeze smaller players out of the market entirely.
The SEC published its proposed rules on August 20. The document is titled “Digital and Virtual Asset Operations, Custody and Markets.” In short, it lays out fresh registration fees, minimum capital thresholds, and compliance obligations for any company that wants to serve Nigerian crypto users.
Under the plan, several categories of operators would each pay a registration fee of ₦30 million. This includes exchanges, custodians, platform operators, offering platforms, and tokenisation platforms. However, that fee is just the starting point. Applicants would also pay a ₦100,000 processing fee and a ₦300,000 application fee before their paperwork even gets reviewed.
The bigger problem, though, is capital. Exchanges and custodians would need to hold a minimum capital of ₦2 billion. On top of that, they would need a fidelity insurance bond covering 25 percent of that amount. Meanwhile, platform operators, offering platforms, and tokenisation platforms face a ₦500 million capital floor. Virtual asset service providers, a separate category, would need ₦200 million in capital and a lower ₦15 million registration fee.
For many Nigerian crypto startups, that kind of money is simply out of reach. Especially for early-stage founders still finding their footing, the numbers look steep. Industry watchers say the requirements favor well-funded foreign exchanges and established local players. Smaller operators, on the other hand, may struggle to raise enough to stay compliant.
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There is also a localisation clause that adds another hurdle. Companies would need to incorporate in Nigeria and maintain a registered office in the country. Additionally, they would need a chief executive who actually lives in Nigeria. There is a carve-out for exceptions, but the default expectation is a real, accountable presence on the ground.
Beyond capital and localisation, the SEC also wants deeper visibility into how money moves. For instance, regulated firms could be required to grant the commission electronic access to wallet, custody, and settlement data. Companies would also need to report transactions involving Nigerian residents. This includes wallet addresses, transaction values, and timestamps.
Costs do not stop at registration either. The SEC has proposed ongoing supervisory fees tied to turnover. Under the incubation programme, these fees rise once a firm moves to full registration.
The timing here matters too. President Bola Tinubu signed an executive order on virtual assets in July. Then, in early August, the Nigeria Revenue Service issued new guidelines on taxing virtual assets. Together with this SEC proposal, the moves point to a coordinated push to bring crypto under formal government oversight.
For now, the SEC has opened the draft rules for public comment. The window closes on September 3. So, startups and industry groups still have a narrow chance to push back on the numbers before they become final. Until then, the proposal remains just that: a proposal, not law.
Still, for founders running lean crypto startups in Nigeria, the message is clear. Operating in one of Africa’s biggest crypto markets is about to get far more expensive. And some may not be able to afford to stay in the game.
