Nigeria’s Evolving Crypto Regulatory Regime: A Practitioner’s Guide for VASPs

1) Who Regulates Crypto in Nigeria – and What’s the Core Rulebook?

Nigeria’s Securities and Exchange Commission (SEC) is the lead regulator for digital assets that fall within the securities perimeter. Its 2022 Rules on Issuance, Offering Platforms and Custody of Digital Assets (the “Digital Asset Rules”) created the first end-to-end framework for Digital Asset Offering Platforms (DAOPs), Digital Asset Exchanges (DAXs), Digital Asset Custodians (DACs), and VASPs more broadly. These rules sit alongside SEC’s general operator regime and AML/CFT requirements.

Because access to banking rails matters, the Central Bank of Nigeria (CBN) in December 2023 issued Guidelines on the operation of bank accounts for VASPs, effectively allowing licensed/recognized VASPs to maintain bank relationships – provided they meet strict AML/CFT, consumer protection and risk-management standards. This replaced the earlier “no-banking” posture and aligned the financial system with a regulate-don’t-ban approach.

What changed recently? In 2024 the SEC launched the Accelerated Regulatory Incubation Programme (ARIP) to onboard operating and prospective VASPs, a supervised pathway that grants an interim status while firms transition to full registration as the rule set evolves. In late-2024 and 2025, amendments integrated ARIP into the regime and raised certain prudential thresholds (e.g., minimum paid-up capital) to reflect market risk.

2) Marketing Crypto Services in Nigeria: What You Can (and Can’t) Do

1. Principles first. All public communications must be fair, clear and not misleading, consistent with filed documents, and must not imply SEC approval. That baseline flows through the 2022 Digital Asset Rules and is reinforced in the DAX obligations to publish prominent risk warnings, fee disclosures, access criteria, complaint channels, and contingency information on the platform.
2. Third-party promotion and “influencers.” The SEC’s 2024–2025 amendments tighten oversight of third-party promoters and marketing activities around crypto products, reflecting a policy shift toward prior-review/“no-objection” style controls. Treated conservatively, you should expect heightened approval and record-keeping and avoid any marketing that could be construed as operating without authorisation. 
3. ARIP and marketing. If you are in ARIP, keep to scope, disclosures, and risk warnings mandated by your recognition letter; over-marketing outside the permitted perimeter is a fast route to enforcement.

3) Which Activities Are Regulated?

The rulebook carves the perimeter in two layers:

• Entity & service layer (VASPs): exchange between crypto↔fiat and crypto↔crypto, transfer of virtual assets, safekeeping/administration (custody/wallet), and participation in/provision of financial services related to an issuer’s offer/sale. If you do any of these “in or from Nigeria,” you are in scope.
  
• Platform layer:
  
  1. DAOP – primary offering gateway that conducts due diligence, disclosure vetting, and listing/launch governance for digital asset issuances.
     
  2. DAX – secondary market venue for trading digital assets that meet listing and governance standards set out in Part E.
     
  3. DAC – entity providing custody/safekeeping, segregation and key-management controls for client assets, whether as a standalone service or supporting a DAOP/DAX. (See also the DAOP rule cross-reference to using a registered custodian.)

4) Paid-Up Capital and Fees (Baseline vs. Recent Increases)

Baseline (2022 Rules in force)

• DAOP – Minimum paid-up capital: ₦500,000,000; Fidelity bond: ≥25% of paid-up capital. The corporate document set includes CAC filings, audited accounts/statement of affairs, and TIN certificate, among others.
  
• DAX – Fees: filing ₦100,000, processing ₦300,000, registration ₦30,000,000, sponsored individual ₦100,000; Minimum paid-up capital: ₦500,000,000; Fidelity bond: ≥25% of capital; all funds via RTGS.

Amendments (2024–2025)

The Amended Digital Asset Rules incorporate the ARIP pathway and increase several thresholds, notably minimum capital to ₦1,000,000,000 for certain classes (e.g., DAX and DAC), with knock-on increases to processing/registration and sponsored individual fees. Treat these as the new planning baseline and verify the latest SEC circular before filing.

Budget note. Nigeria has been actively updating fee schedules and prudential floors. We recommend building a sensitivity band around capital and fee items (±15–25%) to accommodate circular-level updates during your application window.

5) Mandatory Licensing Requirements (What the SEC Looks For)

1. Substance & fitness: Nigerian incorporation, demonstrable local mind-and-management for key decisions, and fit-and-proper directors/principal officers (integrity, no disqualifying history, competence). DAOP/DAX principal officers must meet education/experience thresholds and be registered as sponsored individuals.
2. Governance: Board charters, policies covering conduct, conflicts, safekeeping, complaints, incident response, business continuity, and outsourcing oversight. Exchanges must maintain platform access criteria, education materials, fee disclosures, complaint handling, and contingency plans.
3. Prudential: Maintain paid-up capital at or above the relevant floor and a fidelity bond ≥25% of capital (DAOP/DAX). The SEC may impose additional financial requirements depending on your risk profile.
4. Safekeeping/segregation: Clear custody model – either via a registered DAC or, if self-custody, compliance with the custodian requirements in the Rules; segregated client assets, secure storage mediums, and accurate client asset registers.
5. AML/CFT & banking: Full AML manuals (CDD/ECDD, PEP/sanctions screening, STRs), record-keeping, and CBN-compliant bank account operations for VASPs (risk-based controls, consumer safeguards, and incident handling). 

6) Application Procedure – From Scoping to Approval

Step 1: Regulatory scoping & ARIP decision. Determine your service perimeter (DAOP, DAX, DAC, or combo), entity architecture, and whether to enter ARIP first. ARIP offers an approval-in-principle style recognition with supervisory guardrails, typically time-boxed (up to 12 months under amended rules) before transition to full registration.

Step 2: Assemble the SEC pack. For each licence class:

• Forms & fees (see DAX as an example: filing, processing, registration, and sponsored individual fees).
• Corporate set (CAC docs, Articles/Memo with proper objects, share capital evidence, audited accounts/statement of affairs, TIN certificate).
• Programme of operations (services, client segments, liquidity/market access, custody/wallet model, order flows, and settlement). (DAOP/DAX sections outline the minimum content and ongoing obligations.)
• Governance (board charter, policy suite, conflict-management, complaint process, business continuity).
• People (fit-and-proper dossier, CVs, integrity statements, professional references; sponsored individuals registration).
• Prudential & insurance (paid-up capital proof and fidelity bond; plan for capital maintenance under the amended thresholds where applicable).
• Technology & security (system architecture, access controls, key-management, incident response, audit logging, testing cadence). (Rules require secure environments and contingency arrangements.)
• Custody & safeguarding (DAC engagement or self-custody policy, segregation and client-asset reconciliation procedures).

Step 3: File & respond. Submit via SEC channels; expect iterative queries on capital provenance, tech/custody specifics, outsourcing oversight, and conflicts/market-conduct. ARIP participants will have conditions and reporting; full registrations progress to grant upon satisfactory closure of queries.

Step 4: Post-authorisation operations. Maintain governance/records, update risk warnings and fee disclosures, notify material changes (e.g., tech stack, outsourcing), and meet AML/CBN obligations tied to your banking relationships.

7) Documents Required – Your Operator Dossier (Practical Checklist)

Corporate & ownership

• CAC certificate, Memorandum & Articles (with crypto-appropriate objects), share capital statements, registers of members/directors, UBO chart.

Programme of operations

• Detailed service descriptions (DAOP/DAX/DAC), liquidity & settlement plans, custody model (DAC or self-custody), cybersecurity posture, outsourcing map.

Governance & policies

• Conduct & disclosure (including platform risk warnings and fee transparency), conflicts of interest, complaints, outsourcing, BCP/DR, incident and breach handling, market-conduct for DAX (no proprietary trading or employees trading on own platform; no financial assistance to trade).

Prudential & insurance

• Paid-up capital evidence (bank balances, qualifying assets), fidelity bond (≥25%), and any insurance instruments. (Model to amended thresholds where relevant.)

AML/CFT & banking

• Firm-wide AML programme, enterprise-wide risk assessment, sanctions/PEP procedures, record-keeping, suspicious transaction reporting; CBN-compliant bank account governance and consumer protection artefacts.

People & fitness

• CVs, integrity declarations, criminal/administrative checks, sponsored-individual forms and proof of competence/time commitment.

8) Practical Timelines and Friction Points

• Capital provenance (source and seasonality of funds) is examined closely; ring-fence operational runway apart from client assets.
• Tech/custody depth – expect probing on key ceremonies, HSM/multisig controls, incident playbooks, and recovery.
• Outsourcing – keep critical-function oversight onshore and ensure data-access and audit clauses.
• ARIP – treat as a supervised “AIP”: document boundaries, reporting cadence, and conversion plan to full registration.

9) How CRYPTOVERSE Legal Gets You Authorised – Fast and Defensibly

We deliver an operator-grade authorisation pack mapped line-by-line to Nigeria’s Digital Asset Rules and current SEC circulars:

1. Regulatory design & perimeter mapping – pick the right path (ARIP vs. full), entity structure, and licensing mix (DAOP/DAX/DAC).
   
2. Policy & control stack – conflicts, market-conduct, custody/safeguarding, incident/BCP, outsourcing, AML/CBN account governance, and disclosures aligned to DAX/DAOP rule text.
   
3. Capital & fee modelling – we run 2022 baselines and 2025 increases side-by-side so you can lock budgets and avoid rework as amendments kick in.
   
4. Regulator engagement – structured responses to SEC queries (tech, custody, outsourcing), with artefacts your engineers can implement without slowing product.
   
5. Go-to-market guardrails – marketing copy-deck QA, risk-warning matrices, and documentation for third-party promotion – so growth doesn’t jeopardise the licence.

Ready to file? CRYPTOVERSE Legal will scope your business model, build a complete SEC-ready dossier, and steer you from ARIP recognition to full registration – with policies and controls that satisfy both SEC and CBN expectations.

Disclaimer: 

This article is for general information only and does not constitute legal advice. Regulatory thresholds, fees, and supervisory practices change via circulars and amendments. For tailored counsel and filings, engage CRYPTOVERSE Legal.

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