Nigeria Reps Reject SEC’s ₦1B Crypto Firm Rule as ‘Too Harsh’!

Nigeria’s legislative arm has pushed back against a proposed crypto regulation initiative after the Securities and Exchange Commission (SEC) sought to raise the minimum capital requirement for virtual-asset service providers to ₦1 billion. 

The House of Representatives described the measure as excessive and warned that it could choke innovation in the Nigeria crypto regulation framework. This decision marks a key moment in Nigeria’s evolving approach to overseeing blockchain businesses.

Reps Panel Says ₦1B Benchmark Will Stifle Growth

During a technical session at the National Assembly in Abuja, the House’s Ad-Hoc Committee on Economic, Regulatory, and Security Implications of Cryptocurrency Adoption criticized the SEC’s upward shift from ₦500 million to ₦1 billion as “prohibitive.” 

Hon. Olufemi Bamisile, committee chair, argued that the increase threatens to shut out smaller operators and young entrepreneurs from entering the crypto market. He further asserted that regulation must protect consumers without becoming a barrier to access and innovation. 

The committee urged the SEC to revisit this threshold and adopt a more inclusive, scalable framework that suits the realities of Nigeria’s digital economy according to Businessday NG. 

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SEC’s Rationale and Stakeholder Pushback

The SEC has previously defended such requirements as necessary for ensuring financial stability, reducing fraud, and guaranteeing that licensed crypto firms have “teeth” to meet operating challenges. 

Under its digital asset regulations, the SEC also proposed that operators obtain a fidelity bond to guard against internal theft or losses. 

Critics argue that enforcing a ₦1 billion capital floor will favor large or foreign players, squeezing out local startups. They warn it could push younger ventures underground or toward unregulated operations. 

At present, the ₦500 million requirement remains in force pending further consultation and possible regulatory revision. 

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Legal and Regulatory Context in Nigeria

On March 25, 2025, President Tinubu signed the Investment and Securities Act, 2025, which officially places digital assets under the SEC’s regulatory authority by categorizing them as securities. 

According to Mondaq, this change ends aspects of prior ambiguity around crypto operations and aligns regulatory responsibilities more clearly.

Under the new legal framework, all Virtual Asset Service Providers (VASPs) must register with the SEC, comply with rules on transparency and governance, and satisfy minimum capital and operational standards. 

Yet stakeholders suggest that the SEC should take a tiered or cumulative approach—lower capital floors for early-stage exchanges or incubator platforms, rather than a single high barrier. The difference between inclusive growth and overbearing regulation is central to the committee’s concern.

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Implications for Nigeria’s Blockchain Industry

If the ₦1 billion threshold is enforced, many small or mid-sized crypto ventures may struggle to scale or even survive. That could slow adoption in Nigeria’s blockchain industry, which has been vibrant at grassroots and startup levels.

Conversely, revising the requirement could foster broader participation, lower the barrier for innovation, and help Nigeria retain more of its blockchain talent and capital domestically.

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However, loosening requirements may raise concerns about regulatory arbitrage, fraud, or weaker enforcement. The SEC will need to balance protective oversight with flexibility.

Another implication is that this legislative push signals to regulators and industry players that Nigeria is still negotiating the architecture of how crypto will be regulated—top-down imposition is no longer taken at face value.

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Conclusion

In rejecting the SEC’s ₦1 billion capital requirement for crypto firms, Nigeria’s House of Representatives has drawn a line: regulation must not crowd out innovation. The move reignites debate over how to craft crypto policy that protects consumers while nurturing startups.

The coming weeks may see recalibration or compromise in the final rules. But this clash reflects the tension in Nigeria’s crypto policy in 2025: how to build regulation without strangling the very sector it aims to govern.

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FAQ

What is Nigeria’s SEC trying to do with the ₦1 billion rule?

The SEC proposed raising the minimum capital base for Virtual Asset Service Providers from ₦500 million to ₦1 billion. This is meant to ensure that licensed crypto firms have financial solidity and can absorb risks.

Why did the House of Reps reject it?

Lawmakers argue the ₦1 billion threshold is “too harsh” and would shut out smaller operators, impair innovation, and favor big players or foreign entrants.

Does the ₦1 billion rule apply now?

No. The existing ₦500 million benchmark remains in force. SEC’s proposal is under review following pushback and consultation.

What does the 2025 Investment and Securities Act change?

The Act classifies digital assets as securities, giving SEC formal regulatory mandate over VASPs, setting licensing rules, compliance obligations, and oversight powers.

Could a compromise emerge?

Yes. Stakeholders suggest alternatives such as tiered capital requirements, incubator regimes, gradual scaling, or exemptions for early-stage platforms while maintaining oversight safeguards.