Nigeria SEC Draft Would Require Offshore Crypto Firms to Register

Nigeria’s Securities and Exchange Commission published a consultation paper on Aug. 20 proposing licensing, capital and custody requirements for digital-asset businesses that operate in, serve, or target Nigerian residents. The public comment period runs for two weeks and closes on Sept. 3; the SEC’s notice does not specify a cutoff time or time zone.

Under the draft rules, any digital-asset business operating in Nigeria, providing services to Nigerian residents, or targeting Nigerian investors through digital channels would need SEC registration, approval or authorization. Applicants would generally be expected to incorporate in Nigeria, keep a registered office and appoint a resident chief executive or equivalent principal officer and resident sponsored individuals. The text allows for foreign-entity registration or separate SEC authorization where specific conditions are met.

Schedule I of the proposal sets minimum paid-up capital and registration fees by license class. Digital Asset Exchanges and Digital Asset Custodians would face a ₦2 billion minimum capital requirement and a ₦30 million registration fee. Digital Asset Platforms, Digital Asset Offering Platforms and Real World Asset Tokenization Offering Platforms are proposed at ₦500 million capital with the same ₦30 million fee. A general virtual-asset-service-provider category is shown at ₦200 million capital and a ₦15 million registration fee. The schedule would also require a current fidelity insurance bond equal to at least 25% of the stipulated minimum paid-up capital in addition to the stated capital and fees.

The draft places custody and operational limits on custodial providers. At least 80% of client digital and virtual assets would have to be held in cold storage unless the SEC sets a different percentage, and hot and warm wallets would be restricted to operational needs.

Stablecoin issuers would face tiered reserve and collateral floors. Naira-backed and commodity-backed tokens would need at least 100% backing. Stablecoins backed by foreign currency would require 120% reserves. Crypto-backed stablecoins would start at 150% collateral, with Schedule II setting a 150% to 200% collateral range based on factors such as volatility, liquidity, concentration and the quality of collateral.

The proposal also targets foreign stablecoin issuers that seek Nigerian users or whose tokens are proposed for use by regulated entities in Nigeria. Those issuers would need a local representative and must meet reserve, liquidity, redemption-support or other prudential requirements prescribed by the SEC.

If finalized as drafted, the rules would require offshore providers that serve Nigerian users to establish a compliance path under Nigerian regulation. The provisions in the consultation are not binding; the SEC invited comments through the Sept. 3 deadline as it considers whether to adopt the licensing, capital, custody and reserve requirements in the draft.