Will SEC’s new capital requirements for crypto build resilience or erase local innovation?

The shockwaves from the Nigerian Securities and Exchange Commission’s (SEC) latest circular were immediate and unmistakable. Released quietly on January 16, 2026, the directive did not merely adjust the goalposts for market participants; it uprooted them entirely. Across the board, from traditional brokers to fintechs, minimum capital requirements skyrocketed. 

But nowhere was the impact felt more acutely than in the digital assets sector, where capital thresholds for exchanges and intermediaries surged by margins that defy simple arithmetic, with some categories witnessing a staggering 3,400% increase.

​For a digital asset intermediary, the entry ticket is now ₦500 million. For a digital asset exchange, the bar is set at a formidable ₦2 billion. As the dust settles, the ecosystem is left asking two critical questions: What do these numbers actually mean, and can the local industry survive them?

​Demystifying the “Capital” in SEC capital requirements

​The headline figures, ₦500 million and ₦2 billion, have triggered a predictable panic regarding liquidity. However, a closer reading of the guidelines, interpreted through the lens of corporate law, reveals a nuance often lost in the initial outcry.

​Contrary to the fear that companies must lock away billions in idle cash, this “capital” is not necessarily a liquid deposit sitting in a regulator’s escrow account. Instead, it refers to the shareholders’ funds, the total equity of the company. It represents the sum of a company’s worth or assets that can be called upon in the event of liquidation.

​This distinction is vital. It shifts the conversation from “Do we have ₦2 billion in the bank today?” to “Is our business structure and asset base robust enough to be valued at ₦2 billion?” While still a high bar, it moves the target from pure liquidity to structural solvency. The regulator is essentially demanding proof that these entities are not hollow shells but substantial institutions with skin in the game.

​For the SEC, this drastic hike is a calculated move to sanitise a volatile market. Dr Emomotimi Agama, Director General of the SEC, has been clear about the intent: the goal is to build “resilient institutions” that do not wobble when the market turns bearish.

“A strong minimum capital is a strong institution,” Dr Agama argued in a recent interview. “A strong institution protects the investors. The investors are your clients. So who do you want to protect? Is it you or the investors?”

​The SEC’s logic is rooted in the history of financial collapses where undercapitalised firms folded overnight, leaving investors with nothing. By raising the floor, the Commission is forcing a consolidation. They are implicitly telling smaller players to merge, partner, or exit. The era of the “mom-and-pop” crypto exchange is effectively over; the SEC wants to deal with entities that have the fiscal mass to withstand economic shocks.

​Nigerian crypto sector risks foreign capture

​While the argument for investor protection is sound, the “sink or swim” ultimatum carries significant risks for Nigeria’s indigenous blockchain ecosystem. Mela Claude, President of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), warns that the lack of nuance in these requirements could inadvertently hand the market over to foreign giants.

“In the long term, companies with more robust capital bases are what the SEC wants to deal with, but we think the process could be executed with more nuance and thoughtfulness,” Claude notes.

​The primary critique is the “one-size-fits-all” approach. Unlike the banking sector, which utilises a tiered system (regional, national, and international licences) allowing banks to operate according to their capacity, the new crypto guidelines lump practitioners into broad, capital-intensive categories.

​Without a tiered licensing structure, where smaller exchanges could operate with lower limits on volume and custody, local startups may be priced out of existence. “Anything short of this”, Claude warns, “the Nigerian government runs the risk of putting our country at the mercy of foreign economic interests to take over our blockchain ecosystem, like easy pickings.”

​The new guidelines present a fork in the road for Nigerian crypto companies. The immediate future will likely see a flurry of M&A activity, as smaller players scramble to pool assets to meet the ₦500 million or ₦2 billion thresholds. Those who cannot adapt quickly face eviction from the formal market, potentially driving some activity back into the unregulated shadows the SEC is trying to illuminate.

​Ultimately, the SEC has signalled that it prefers a smaller market of giants to a sprawling market of dwarfs. Whether this strategy will create a safer ecosystem for investors or simply a foreign-owned one depends on whether the regulator is willing to consider the tiered approach the industry is desperately calling for. For now, the message is clear: scale up, or step aside.

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