Nigeria digital asset platforms need N500mn minimum paid up capital

The Securities and Exchange Commission of Nigeria has announced new regulations for digital asset platforms operating in the country. These regulations require platforms to provide evidence of a minimum paid-up capital of 500 million naira, with a fidelity bond covering at least 25 percent of the minimum paid-up capital. The CEO of Absidin, Nigeria, Sadiq Abul, recently discussed these guidelines in an interview with CNBC Africa. Abul highlighted the SEC's proactive approach to classifying digital assets as securities and creating a regulatory framework to bring them under the broader securities framework in Nigeria. The SEC has categorized crypto and other digital assets into different segments and established regulations for each segment. These regulations include recognition of initial coin offerings (ICOs) for issuing securities electronically, regulations for digital securities platforms, protection of investors, regulation of digital assets exchanges, and an overarching framework for regulating all participants in the digital assets space through a specialized license called Virtual Assets Services Provider. When asked about the relationship between the SEC's regulations and the Central Bank of Nigeria (CBN) ban on crypto transactions through the financial system, Abul emphasized the ongoing collaboration between the SEC and CBN. While the CBN has expressed skepticism about crypto transactions, the SEC is working to create a regulatory framework that could potentially enable financial institutions to engage with cryptocurrencies. The new rules also address the appointment of CEOs and principal officers of digital asset platforms, stipulating that the CEO shall hold office for a period of five years and be subject to prior approval by the SEC, similar to the CBN's practices in managing banks. One of the key implications of these regulations is the impact on crypto users in Nigeria, one of the top countries with a significant number of crypto users. The regulatory framework is expected to provide more clarity and security for users and investors in the crypto space. Overall, the new regulations set by the SEC aim to create a more structured and secure environment for digital asset platforms in Nigeria, ensuring investor protection, regulatory compliance, and a clear framework for operations.