Nigerian regulators are formally embracing crypto as an economic instrument, but the cost of that legitimacy may be high for the country’s local innovation ecosystem. The Securities and Exchange Commission (SEC) has published its Proposed Rules on Digital and Virtual Asset Operations, Custody and Markets, introducing a billion-naira capital threshold for market participants.

The stakes are considerable: Nigeria has repeatedly ranked among the world’s top markets for grassroots crypto adoption in Chainalysis’ Global Crypto Adoption Index, and years of naira depreciation and high inflation have pushed many Nigerians toward digital assets for savings, remittances and cross-border payments.

In an exclusive interview with Technext, Mela Claude Ake, president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), said the state’s increasingly aggressive financial requirements could be fatal for indigenous crypto startups.

“The proposed SEC rules talk about registration fees in the hundreds of millions, minimum capital requirements in the billions, and taking some percentage of turnover,” Ake said.

Under the proposed framework, any entity seeking registration as a Digital Asset Exchange (DAX) or a Digital Asset Custodian (DAC) must maintain a minimum paid-up capital of N2 billion — roughly US$1.2 million at recent exchange rates. Companies that want to operate Digital Asset Offering Platforms (DAOP) or Real-World Asset Tokenisation Platforms (RATOP) must meet a N500 million capital requirement, while standard Virtual Asset Service Providers (VASPs) face a minimum capital threshold of N200 million.

Ake said the SEC rules become even more difficult for startups when combined with the Nigeria Revenue Service’s virtual assets taxation guidelines, which impose a 1.5% stamp duty on every crypto transaction. The NRS is the tax authority established under Nigeria’s 2025 tax reform laws, which replaced the former Federal Inland Revenue Service.

“When you combine that with the NRS’s virtual assets taxation guidelines, which mandate a 1.5% stamp duty on every single crypto transaction, you can see already that the government runs the risk of milking a cow that is not yet fully mature, and that is dangerous,” he said.

He extended the agricultural metaphor to describe what he sees as a mismatch between government expectations and the state of the sector.

“So, the government is trying to eat a crop that has not yet started to yield enough for a harvest,” Ake said.

The compliance burden goes well beyond capital requirements. The SEC also prescribes an N30 million registration fee for major platforms. Firms entering the Accelerated Regulatory Incubation Programme (ARIP) must pay a supervisory fee based on adjusted turnover: 0.015% for exchanges and 0.0075% for other platforms. After full registration, those charges rise to 0.025% of turnover quarterly for DAX operators and 0.015% for other platforms.

Ake said those costs are especially difficult for an ecosystem that has largely been built by young founders and bootstrapped teams.

“The challenge is that the vast majority of innovators in this sub-sector do not come from big money,” he said. “So, creating minimum capital requirements in the billions and registration fees in the hundreds of millions is still quite problematic for innovation in the sector.”

Nigeria’s regulatory approach has shifted sharply over the past few years, moving from hostility to formal oversight and taxation. In 2021, the Central Bank of Nigeria imposed a broad ban that cut crypto operators off from the formal banking system. The restrictions pushed much of the country’s trading activity onto peer-to-peer platforms, which continued to grow even as operators lost access to bank accounts.

That began to change with the National Blockchain Policy in 2023, which recognised blockchain as critical digital infrastructure. Regulatory activity accelerated in mid-2024, when the SEC introduced the ARIP framework to bring digital asset platforms into compliance and later granted approval-in-principle to firms including Quidax and Busha. Nigeria’s shift mirrors a wider African trend, with South Africa’s Financial Sector Conduct Authority licensing crypto asset service providers since 2023 and Kenya amending its capital markets laws to regulate virtual asset platforms.

In January 2026, the SEC raised the minimum capital requirement for digital asset exchanges from N500 million to N2 billion, giving affected firms until June 30, 2027, to comply.

Oversight was strengthened further in July 2026, when President Bola Tinubu signed the Virtual Assets Coordination Executive Order and established a CBN-led Virtual Asset Council to coordinate supervision across government agencies.

The formalisation continued in August 2026, when the Nigeria Revenue Service issued its Guidelines on the Taxation of Virtual Assets. The guidelines set out how crypto transactions, stablecoins, NFTs, staking rewards, DeFi income and other virtual asset activities will be taxed.

Despite his criticism of the financial terms, Ake said SiBAN recognises the significance of the government’s move to regulate the sector.

“We definitely are appreciative of the fact that the government, the policymakers in government, and the legislature are embracing blockchain and virtual assets,” he said.

However, he argued that the positive signal is weakened by the assumption that the local Web3 sector is already generating substantial taxable wealth.

The SEC rules also include strict operational limits. Retail investors are capped at N1 million per digital asset issuer, with an aggregate limit of N10 million across all digital asset offerings within 12 months.

The framework also sets detailed collateral rules for stablecoins. Naira-backed stablecoins must hold 100% of their outstanding liabilities in cash or central bank instruments. Crypto-backed stablecoins are subject to over-collateralisation requirements of between 150% and 200%.

“The government may have the perception that there is so much money to be made in the sector, and for that reason, some may interpret these rules to mean that the government is coming to take its own cut of the perceived largesse,” Ake said.

He said the current policy direction leaves Nigerian blockchain founders with a difficult choice: secure major venture backing quickly, operate outside the law, or leave the market.

With the rules still at the proposal stage and the June 30, 2027 compliance deadline for exchanges already set, the sector’s next milestone is how the final framework settles these capital and fee thresholds in response to stakeholder feedback.

While he said the virtual assets sector has significant promise, Ake stressed that it remains at an early stage of development.

“It is still growing. It still needs a lot of support, and this is the time to sow and to invest in it. The government needs to be gentler in its policy-making around the industry, more paternal, and more protective of the industry, rather than trying to extract,” he said.