Nigeria proposes strict rules for crypto platforms serving local users
Nigeria’s SEC proposes new rules for crypto platforms
The Nigerian Securities and Exchange Commission (SEC) has released proposed rules that could require offshore crypto platforms to register locally if they serve Nigerian residents or target the country’s investors. The rules aim to regulate crypto businesses operating in Nigeria or reaching local users through digital channels.
The proposal, published on August 20, is open for public comments until September 3. The SEC has not specified a cutoff time or time zone for submissions. These measures are still in the consultation phase and are not yet in effect.
What the new rules would require
- Offshore crypto platforms serving Nigerian users would need to register with the SEC, maintain a local office, and appoint a resident chief executive or equivalent officer.
- Exchanges and custodians would need at least ₦2 billion (about $1.25 million) in capital, while other crypto businesses would face lower requirements.
- Custodians would be required to keep 80% of client assets in cold storage—a type of offline wallet that is less vulnerable to hacking.
- Stablecoins—digital currencies designed to maintain a stable value—would face reserve requirements: 100% for naira-backed tokens, 120% for foreign-currency-backed tokens, and 150% to 200% for crypto-backed stablecoins.
- Foreign stablecoin issuers targeting the Nigerian market would need a local representative and must comply with SEC-prescribed reserve and redemption rules.
Who would be affected
The rules would apply broadly to any crypto business operating in Nigeria, serving Nigerian residents, or targeting the Nigerian market—even if the company is based outside the country. This includes exchanges, custodians, and stablecoin issuers.
The SEC’s proposal states that applicants would generally need to incorporate in Nigeria unless the commission approves an exception. The rules also allow for foreign entities to register under existing SEC frameworks if they meet certain conditions.
What is confirmed
- The SEC published the proposed rules on August 20, 2026, and opened a two-week public comment period ending September 3, 2026.
- The proposal sets a ₦2 billion minimum capital requirement for exchanges and custodians, with lower amounts for other types of crypto businesses.
- Custodians would need to store at least 80% of client assets in cold storage.
- Stablecoin issuers would face reserve requirements ranging from 100% to 200%, depending on the type of stablecoin.
- Offshore platforms serving Nigerian users would need to register locally, maintain a local office, and appoint resident leadership.
What is still unclear
- The SEC has not specified a cutoff time or time zone for public comments due by September 3.
- The proposal does not state when or if these rules will take effect after the comment period.
- It is unclear how the SEC will enforce these rules on offshore platforms that do not comply.
- The proposal does not detail the process or timeline for foreign entities seeking registration or authorization.
Why these rules matter for Nigerian crypto users
If adopted, the rules could make it harder for Nigerians to access global crypto platforms. Offshore exchanges and custodians may choose to exit the Nigerian market rather than meet the new requirements, reducing the number of available services.
The rules could also increase costs for crypto businesses, which may be passed on to users. However, the SEC states that the measures aim to protect investors and ensure that crypto businesses operating in Nigeria meet certain standards.
