The Nigerian Securities and Exchange Commission (SEC) has recently issued new regulations raising the minimum capital requirements for digital asset exchanges and custody institutions to ₦2 billion (approximately USD 1.4 million), a significant increase from the previous threshold of ₦500 million. At the same time, minimum capital requirements for digital asset issuance platforms and tokenized asset service providers have been adjusted to ₦1 billion and ₦300–500 million, respectively. Affected institutions are required to meet the new standards by June 30, 2027, failing which they may face the suspension or revocation of their licenses.
This increase in capital thresholds reflects the regulator’s heightened focus on risk prevention and control within the digital asset sector. As jurisdictions worldwide tighten compliance requirements for crypto-asset service providers, Nigeria’s policy adjustment is widely viewed as an important step toward promoting healthy market development and safeguarding investor interests.
Strengthening Capital Foundations While Balancing Market Stability and Risk Control
Raising minimum capital requirements enhances the resilience of exchanges and custody providers, ensuring stronger financial stability when facing market volatility, technical failures, or potential illicit activities. Higher capital thresholds also serve to filter out undercapitalized or weakly compliant entities, thereby reducing market disorder and limiting investor losses.
Nigeria’s regulatory adjustment further emphasizes a tiered supervisory approach for digital asset service providers. By setting differentiated capital standards based on business models and risk profiles, regulators can more accurately identify and control sector-specific risks.
Building Compliance Capabilities Under Evolving Regulatory Trends
Globally, regulatory policies are increasingly shifting from a binary “permit or prohibit” approach toward more mature and comprehensive compliance frameworks. Capital requirements represent only one component of this evolution; a robust compliance regime also encompasses transaction behavior monitoring, transparency of fund flows, and structured risk indicator systems.
Within this context, KYT (Know Your Transaction) has emerged as a core regulatory focus. KYT emphasizes continuous identification and risk assessment of transaction behavior itself, rather than reliance solely on static audits.
Transaction monitoring systems such as Trustformer KYT leverage real-time analysis and risk scoring of on-chain transaction data to provide compliance teams with more granular insights, thereby enhancing regulatory compliance capabilities and improving the speed and effectiveness of risk response.
Conclusion: Higher Regulatory Standards Signal Industry Maturity
The adjustment of capital requirements by Nigeria’s SEC forms part of the ongoing refinement of the global digital asset regulatory framework. As policies and market conditions continue to evolve, institutional compliance capabilities, transparency, and risk management will become decisive factors in long-term competitiveness.
The elevation of regulatory standards not only helps to normalize market order but also strengthens investor protection and supports the digital asset market’s transition toward a more stable and sustainable development trajectory.