On March 15th 2024, the Nigerian Securities and Exchange Commission proposed an amendment to the stipulations on the issuance, and custody of digital assets to the public as well as stakeholders and offering platforms. The five-part proposal covered themes from applicability to registration requirements. And serves as a pointer in the right direction for digital asset regulation in Nigeria.

The Nigerian SEC has put its foot on the pedal even further by taking the minimum paid-up capital for virtual asset service providers to a solid one billion naira. This figure is twice the initial proposed requirement of five hundred million and can consist of the following;

Quoted securities
Bank balances
Investments.

Virtual asset service providers in this case include OTC desks, crypto exchanges and peer-to-peer marketplaces.

These events beg the question of what's next for Nigeria's crypto scene. Will the country have some semblance of stability or will the saga continue to unfold in disfavor of cryptocurrency in the country?

In the latest twist, an anonymous crypto exchange operator reveals that operators received the draft proposal just recently. The draft proposal is said to be straight from the SEC, outlining hefty requirements that seem to favour big fishes in the pond.

In a commentary, Rume Ophi, a voice in the crypto community, says:

'This game is for the big boys. But not everyone's ready to play along.'

Another expert, Tim Akimbo, warns that these regulations could pave the way for foreign giants to take over the local crypto scene, leaving homegrown players out in the cold.

What's at stake? A staggering N1 billion minimum capital requirement, plus a Fidelity Bond that's no small change. What are Fidelity Bonds? These are insurance types that secure businesses against losses caused by certain criminal acts committed by employees like theft, forgery and fraud,

And that's not all – the SEC's got the power to impose more financial demands on digital asset operators according to the rules. This imposition is determined by the risks, operations and nature of the company.

In addition to this, the SEC has also gone on to increase the number of registration documents to be submitted. The new rules give that:

‘A sworn undertaking that the applicant will be able to operate an orderly, fair, and transparent market concerning the securities and derivatives that are offered or traded, on or through its platform.'

It's a high-stakes game of crypto cat and mouse, with the future of Nigeria's digital asset landscape hanging in the balance. Will the locals bow out, or will they fight to stay in the ring?"