Nigeria’s House of Representatives Ad-Hoc Committee on cryptocurrency and POS operations has raised alarm over the Securities and Exchange Commission’s (SEC) proposal to hike the capital base requirement for Virtual Asset Service Providers (VASPs) from ₦500 million to ₦1 billion.
During a technical session with regulators and security agencies, the Committee, led by Olufemi Bamisile, labeled the proposed jump as high and prohibitive, warning it could stifle innovation, shut out local startups, and push operators underground.
Details of the Proposed Policy
- The SEC’s original benchmark was ₦500 million, which is currently in force while consultations continue.
- The proposed increase to ₦1 billion is intended to ensure only credible, financially stable operators enter the space, along with a requirement for fidelity bonds (insurance against internal fraud or losses).
- The Committee recommended SEC revisit and moderate the threshold to avoid excluding genuine, growth-stage innovators in Nigeria’s digital finance ecosystem.
See more related: Nigeria Intensifies Crackdown on Crypto Investment Scams
Role of EFCC & Confiscated Digital Assets
During the session, the Committee requested the EFCC (Economic and Financial Crimes Commission) to submit full records of all crypto assets confiscated in criminal investigations, as the SEC’s regulatory framework is refined.
The EFCC confirmed they maintain designated digital wallets across regional offices to securely custody seized crypto holdings.
Implications for Nigeria’s Crypto Ecosystem
Risks of Overregulation:
A capital requirement as high as ₦1 billion may disproportionately favor large firms—especially foreign or well-funded exchanges—while sidelining smaller, homegrown innovators. This could limit competition and stifle entry in Nigeria’s vibrant crypto scene.
Innovation at Stake:
Nigeria is among Africa’s most active crypto markets. Preventing smaller startups from participating could slow local fintech development, reduce employment in Web3, and erode Nigeria’s position as a crypto leader.
Regulatory Signal:
The panel’s intervention suggests lawmakers are keen to balance consumer protection with innovation-friendly regulation. This could pressure SEC to adjust course before finalizing the rule.
Conclusion
The House Reps’ advisory to SEC is a reminder that regulation must be measured, equitable, and growth-oriented. Nigeria’s crypto future depends not only on oversight, but on frameworks that empower local operators to thrive—not force them out.
