Nigeria SEC proposes ₦2B minimum capital for crypto exchanges, 24hr incident reporting
Nigeria's Securities and Exchange Commission released proposed rules on August 20 requiring cryptocurrency firms to separate customer funds from company assets and meet strict capital thresholds. Digital Asset Exchanges and Custodians need ₦2 billion minimum paid-up capital, while Platform Operators and Offering Platforms require ₦500 million, and Virtual Asset Service Providers need ₦200 million. All must maintain fidelity insurance bonds covering 25% of applicable capital.
The framework mandates incident reporting within 24 hours with detailed follow-up in 48 hours for cyber incidents, losses, or operational failures—mirroring banking sector rules. Retail investors gain a five-business-day cooling-off period for certain digital asset offerings to withdraw subscriptions and get full refunds. The proposal responds to past failures like Patricia's January 2022 breach (~$2 million loss) that froze customer withdrawals, aiming to prevent asset inaccessibility when platforms fail.
Custodians must store 80% of client crypto assets in cold storage and cannot use client funds for proprietary trading without explicit consent and SEC approval. Foreign-issued stablecoins like USDT would require SEC approval before listing on Nigerian exchanges. Will these rules make crypto trading safer but more expensive for Nigerians, potentially pushing users toward unregulated platforms or improving long-term market trust?