Nigeria’s SEC wants crypto firms to share transaction data

Nigeria's Securities and Exchange Commission (SEC) has introduced proposals to regulate cryptocurrency firms more closely. These rules would require digital and virtual asset operators to register with the SEC, set capital requirements, and grant the commission deeper visibility into transactions, wallets, and the movement of digital assets within the country. Operators targeting Nigerian users would need to register, even if their operations are based outside the country.

The regulations cover exchanges, custodians, virtual asset service providers (VASPs), tokenization and digital asset offering platforms, and mark a significant shift in Nigeria's approach to cryptocurrency regulation. Previously, the focus was on bringing virtual asset businesses into a sandbox framework, but now the SEC aims to oversee their operations, asset movements, and interactions with the broader financial system.

Firms would be required to share operational, transactional, financial, wallet, custody, and settlement data, including wallet addresses, transaction values, timestamps, and counterparty information. Crypto companies could face registration denial if they cannot provide satisfactory information, governance, ownership, financial condition, operational model, technology, risk controls, compliance arrangements, or regulatory status.

The SEC specifically targets newer crypto business models, such as staking, lending, yield products, liquidity pools, peer-to-peer (P2P) and over-the-counter (OTC) trading, and non-custodial wallet services. Companies engaging in these activities would need to adhere to the proposed framework. The rules also aim to address the risks associated with custodial arrangements, requiring related-party custody to be managed by a separately incorporated and regulated custodian.

Additionally, customer assets cannot be mixed with company funds. The accelerated regulatory incubation program (ARIP) will grant approval-in-principle for 12 firms, with a two-year operating scope and enhanced supervision.