Nigeria SEC proposal would force offshore crypto platforms to set up locally

Nigeria's Securities and Exchange Commission wants to bring crypto businesses inside its licensing perimeter when they operate in the country, serve Nigerian residents, or target the nation's investors or market through digital channels. The proposed rules would raise the cost of serving Nigerian users by combining local-presence requirements with capital, custody and stablecoin-reserve tests.

The regulator published the proposal on Aug. 20 and opened comments for two weeks, setting the calendar deadline at Sept. 3. The SEC page does not state a cutoff time or time zone. The measures remain proposals under consultation, not rules already in force.

The scope clause is broad enough to reach offshore exchanges and other platforms based on whom they serve, rather than only where the business is incorporated. It covers anyone operating in Nigeria, providing services to residents, or targeting Nigerian investors or the market directly, indirectly or through digital channels.

A digital-asset business would need SEC registration, approval or authorization under the proposed text. Applicants generally would have to incorporate in Nigeria unless the Commission approves otherwise, maintain a registered office in the country and appoint a resident chief executive, managing director or equivalent principal officer alongside resident sponsored individuals. The text also contemplates foreign-entity registration or authorization through SEC frameworks when their conditions are met.

Foreign stablecoin issuers would have a distinct local route. An issuer targeting the Nigerian market, or whose token is proposed for use by a regulated entity there, would have to maintain a local representative and comply with reserve, liquidity, redemption-support or other prudential requirements prescribed by the SEC.

The ₦2 billion threshold does not apply to every license class. Schedule I assigns that minimum-capital level to Digital Asset Exchanges and Digital Asset Custodians, with a separate ₦30 million registration fee for each. Digital Asset Platforms, Digital Asset Offering Platforms and Real World Asset Tokenization Offering Platforms are listed at ₦500 million capital with the same fee. The general VASP category is set at ₦200 million capital and a ₦15 million registration fee.

Schedule I would also require a current fidelity insurance bond covering at least 25% of the stipulated minimum paid-up capital. That bond sits alongside, rather than inside, the minimum-capital and registration-fee requirements.

Custodians would face an additional storage test. At least 80% of client digital and virtual assets would have to remain in cold storage unless the SEC sets another percentage, with hot and warm wallets limited to operational needs.

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

If adopted, the proposal would force offshore providers serving Nigerian users to find a local compliance path while assigning the steepest stated capital test to exchanges and custodians. Stablecoin issuers would face a different balance-sheet burden tied to the assets supporting their tokens.

The comment period closes Sept. 3.