SEC draft rules could force consolidation in Nigeria’s digital assets industry

The Securities and Exchange Commission’s (SEC) draft rules on digital asset operations have been read by operators as a comprehensive rulebook for registration, custody, stablecoins, and exchange conduct. But they have also been read by at least one person building in the space as a filter.

“The capital bar isn’t calibrated to what Nigerian crypto volume actually generates in revenue. It’s calibrated to what the SEC wants the survivors to look like,” one industry player, who requested anonymity to speak freely, told Condia. “That’s a legitimate policy choice, but let’s not pretend it’s not going to shrink the field by half or more.”

The number in question is ₦2 billion, the minimum capital the SEC now requires of any digital asset exchange or digital asset custodian. Platform operators and offering platforms will be required to stump up ₦500 million, while virtual asset service providers have to put up ₦200 million.

That’s in addition to a ₦30 million registration fee, a fidelity bond covering at least 25% of paid-up capital, and supervisory fees charged against turnover.

For an industry that has largely operated informally, that’s a high bar to scale. “Honestly, no, not across the board,” the player said when asked whether operators could realistically meet the June 2027 deadline set by the Commission.

“A handful of players with foreign backing or recent raises can get there before June 2027. Everyone else is going to be doing one of three things: merging, downgrading their licence category to fit a lower tier, or quietly exiting the market,” they added.

The trade that doesn’t fit the rulebook

If the capital requirement is the headline, the less obvious risk lies in how the rules treat peer-to-peer and over-the-counter trading; the channels through which a large share of Nigeria’s crypto activity moves. Under the new framework, a Digital Asset Exchange cannot operate P2P or OTC trading by default; it must apply and be approved separately for such activities.

That matters because, by most industry estimates, P2P crypto activity continues to power remittances, treasury flows and everyday retail activity that is never reflected in a conventional order book.

“This is the sleeper risk nobody’s talking about loudly enough,” the player said. “If separate approval for that activity doesn’t come through cleanly, you’ve got two outcomes: either it goes further underground and the SEC loses the visibility it’s trying to gain, or it gets priced out and pushed offshore to platforms with zero Nigerian oversight. Either way is worse for the regulator than what they’re replacing.”

Before an entity can seek full registration, the rules route almost every applicant through the Accelerated Regulatory Incubation Programme (ARIP), a pre-registration assessment that grants, at most, a two-year approval-in-principle. Yet, even that is not full registration.

The programme has existed in practice since mid-2024, with a handful of new admissions this year. But according to the player, its actual throughput has been narrow.

“The programme started effectively in mid-2024, some new admissions this year, and only two firms got provisional approval in 2024, neither with a full licence yet, same as the recent firms,” they said. “So ‘started the ARIP application’ undersells it. Most players aren’t stuck in the process, they’re stuck waiting for the door to reopen. The ones who got in earlier have a real structural advantage now, and everyone else is watching a moat get built in real time.”

ICYMI: $100 billion in digital asset flows escapes Nigeria’s licencing regime

Asked for an estimate of how many currently operating platforms would still be licensed and running 12 months from now, the answer was unambiguous.

“If I’m being blunt, a small number. Single digits with real licences, a wider tier operating on provisional or incubation status hoping the deadline gets softened, and a meaningful chunk that has already quietly wound down Nigerian operations or restructured offshore. This looks like a consolidation event, not a compliance exercise.”

The Commission has engaged with the industry to some degree. The ARIP sandbox itself is evidence of that. But the player drew a sharp contrast with how the Central Bank of Nigeria (CBN) handled the bank recapitalisation exercise.

“There’s been dialogue here and there, the SEC isn’t operating in a vacuum, and the sandbox model shows some willingness to engage,” they said. “

But the sequencing tells its own story: rates were set, deadlines were set, and the industry got a circular, not a negotiation. Compare that to how the CBN handled bank recapitalisation, with years of runway and consultation. Crypto got a fraction of that. Whether that’s intentional pressure or just less institutional patience for the sector, the effect is the same — operators are reacting, not shaping.”

Condia reached out to the SEC for comments on this story but no response had been received at the time of publication.