Nigeria’s Securities and Exchange Commission (SEC) has drawn a sharp line in the country’s fast-growing crypto market, introducing a N2 billion minimum paid-up capital requirement for Digital Assets Exchanges (DAXs) and Digital Assets Custodians, a move that has divided operators between those who see it as overdue market discipline and others who fear it could choke local innovation.
In a circular issued on January 16, 2026, the regulator said the revised capital framework, its first major update since 2015, was designed to strengthen financial resilience, improve investor protection and align Nigeria’s capital market with evolving global standards, as digital finance risks grow in scale and complexity.
But with a compliance deadline of June 30, 2027, industry players warn that the steep capital bar could trigger an industry shake-out, forcing smaller crypto firms to merge, downgrade their licences or exit the market entirely.
SEC: stability before scale
Under the new rules, Digital Assets Exchanges and Custodians must maintain a minimum paid-up capital of N2 billion, while other virtual asset service providers (VASPs) face requirements ranging from N300 million to N1 billion, depending on licence category. The framework also raises capital thresholds for other digital-first operators, including robo-advisers, crowdfunding intermediaries and alternative investment managers.
The SEC said the changes reflect the growing volumes of funds managed through digital platforms and the need to reduce systemic risk in a market where operator failures could have widespread consequences. Firms that fail to meet the new thresholds by the deadline risk sanctions, including suspension or withdrawal of registration.
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According to the regulator, higher capital buffers would ensure that only firms with sufficient financial depth, governance structures and risk management systems are allowed to operate in a sector increasingly exposed to fraud, volatility and cross-border flows.
‘Just okay’ for the risks
Some industry veterans have welcomed the tougher stance. Sir Demola Aladekomo, chairman and founder of CHAMS Plc, described the SEC’s move as timely and necessary, given Nigeria’s high crypto adoption and history of unregulated participation.
“The business of crypto is global. It is going on whether we like it or not. We must commend the SEC for being very proactive in ensuring that we get into it with proper regulation,” Aladekomo said in an interview with BusinessDay.
He described the N2 billion requirement as “just okay” when viewed against the scale of transactions and inherent risks in crypto operations, noting that capital is only the first layer of scrutiny.
According to him, the licensing process also involves checks on systems and security architecture, know-your-customer requirements for directors, technology deployment, provisional approvals and post-licensing audits. “If smaller players are serious about operating, they should look at mergers or acquisitions,” he said.
Measured compliance from licensed operators
For operators already within the regulatory net, the new rules signal a tougher but unavoidable phase.
Moyo Sodipo, chief operating officer of Busha, one of Nigeria’s SEC-provisionally licensed crypto exchanges, told BusinessDay that the higher capital requirement reflects a stricter assessment of risk and market integrity.
“The increased capital requirements signal a stricter regulatory assessment of risk and market integrity in the digital asset space,” Sodipo said.
He added that Busha would continue to engage constructively with the regulator while advocating “fair and proportionate rules that support a healthy, sustainable ecosystem.”
Critics warn of market exclusion
Others, however, argue that the rule risks sacrificing innovation for control. Obinna Iwuno, chief executive of CBC Blockchain Services, described the N2 billion threshold as excessive and globally uncompetitive.
Iwuno questioned the rationale behind the hike and accused regulators of mischaracterizing crypto-related losses. “Increasing capital requirements to N2 billion makes Nigeria the most expensive jurisdiction in the world for crypto license. And yet Nigeria is not even among the top 10 markets in the world in terms of liquidity and volume,” he asserted.
Iwuno warned that the policy would kill the markets and eliminate local competition, stating, “Local competition is dead. There is no protection for even local [players]… Many of these companies you are asking to bring N2 billion are people who are looking to raise 100,000 dollars… just to scale up their business.”
He drew parallels to the early days of fintech and banking, noting that heavy requirements then would have prevented the rise of institutions like Zenith, GTBank, or others. “If such heavy requirements was placed for other financial sectors at inception, then we would not have the big banks we have today,” he affirmed.
He predicted the move would push Nigeria’s global crypto ranking further down, with foreign players hesitant despite the capital being nothing to them, due to Nigeria’s smaller market size compared to places like Dubai.
“Having the money is not the one thing… If in Dubai I am paying $100,000 why should I come to Nigeria and pay $1.5 million when Nigeria cannot produce 25 percent of what Dubai is producing for me?”
Calling for a tiered licensing regime (e.g., Tier 1, Tier 2, Tier 3 with varying thresholds), Iwuno advocated protecting local startups first. “Why don’t you have a tiered licensing regime?… Protect the local startups first. The local companies first. Nigerian companies first,” he appealed.
The new rules also affect a wide range of digital-first players, including fintech operators, virtual asset service providers (VASPs), crowdfunding platforms, robo-advisers, fund managers, and market infrastructure institutions.
One of the most notable changes targets robo-advisers, automated investment platforms that rely on algorithms rather than human advisers. Under the revised framework, the minimum capital requirement for robo-advisers has increased tenfold, from N10 million to N100 million, a move the SEC said reflects the growing scale of assets and investor funds managed through such platforms.
Crowdfunding intermediaries have also been hit by a capital increase, with minimum requirements doubled from N100 million to N200 million. The regulator said the adjustment is aimed at better protecting retail investors who increasingly rely on digital platforms to raise or deploy capital.
The revised rules also raise capital requirements for alternative investment managers operating in the digital and private markets space. Private equity fund managers are now required to maintain a minimum capital base of N500 million, while venture capital fund managers must hold at least N200 million.
For Nigeria’s digital finance firms, the changes signal a clear regulatory shift: innovation alone will no longer be enough. As the SEC tightens oversight, access to capital, strong governance structures, and long-term financial resilience are set to become defining factors in who survives and thrives in the country’s evolving digital capital market.
