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By Tracy Moses
The House of Representatives Ad-Hoc Committee probing the Economic, Regulatory, and Security Implications of Cryptocurrency Adoption and Point-of-Sale (POS) Operations in Nigeria has called on the Securities and Exchange Commission (SEC) to review the ₦500 million to ₦1 billion capital base requirement imposed on Virtual Assets Service Providers (VASPs).
Nigeria has, in recent years, emerged as one of the top countries in global cryptocurrency usage, propelled by a tech-savvy youth population and widespread mobile connectivity. However, regulatory ambiguity continues to pose major challenges to growth in the sector.
In May 2024, the SEC introduced new regulations mandating that Virtual Assets Service Providers maintain a minimum paid-up capital of between ₦500 million and ₦1 billion, depending on their category.
While the Commission said the directive was aimed at promoting investor confidence and financial system stability, stakeholders have argued that it is unrealistic, particularly for start-ups and small players in the digital asset space.
The House Ad-Hoc Committee, chaired by Hon. Olufemi Richard Bamisile, was established earlier this year to investigate the diverse implications of cryptocurrency trading and POS operations, especially in the context of increasing cyber fraud, money laundering, and other related crimes.
At a technical session held on Monday, October 13, at the National Assembly Complex in Abuja, lawmakers described the SEC’s capital threshold as excessive and potentially harmful to the growth of the sector. They cautioned that such stringent financial requirements could stifle innovation, push operators into unregulated spaces, and limit opportunities for young Nigerians eager to participate in the digital economy.
“The ₦500 million to ₦1 billion capital requirement is simply too steep for emerging participants in the crypto market. Regulation should encourage innovation, not discourage it,” one lawmaker remarked.
The Committee, therefore, urged the SEC to revisit the policy and develop a more flexible and inclusive regulatory approach that balances investor protection with innovation.
During the meeting, the Economic and Financial Crimes Commission (EFCC) informed the lawmakers that all digital and virtual assets seized from individuals or entities involved in financial crimes are currently in the Commission’s custody. The EFCC disclosed that dedicated digital wallets have been created in all its zonal offices to securely store such assets.
The Committee mandated the anti-graft agency to provide a comprehensive inventory of all confiscated digital assets to aid its ongoing investigation and the development of informed legislative recommendations.
Hon. Bamisile reaffirmed the Committee’s resolve to develop a robust framework that promotes responsible innovation while safeguarding the integrity of Nigeria’s financial system. He assured that the Committee’s final report would seek to balance innovation, regulation, and security.
However, members expressed displeasure over the non-attendance of several key institutions invited to the session, including the Office of the National Security Adviser (ONSA), Central Bank of Nigeria (CBN), Nigerian Communications Commission (NCC), Federal Inland Revenue Service (FIRS), Ministry of Finance, and the Ministry of Communications, Innovation and Digital Economy. Bamisile cautioned that such absences could weaken the coordinated national response needed to harness the benefits and manage the risks associated with digital assets.
The Committee is expected to continue its consultations with relevant stakeholders, with its recommendations anticipated to significantly shape the future of cryptocurrency regulation in Nigeria and advance the country’s broader goals of financial inclusion and digital transformation.