VASPA Submits Further Response to SEC Nigeria, Focusing on Fees and Registration Gateways for Virtual Asset Service Providers
A Crucial Call for Participation in a Survey from the Virtual Asset Service Providers Association (VASPA)
Press Release
VASPA
/
Nigeria
VASPA Submits Formal Commentary to the SEC on the Proposed Digital and Virtual Asset Rules
Author
VASPA Admin
Post Date
September 5, 2026
ABUJA FCT, NIGERIA — September 5, 2026 — The Virtual Asset Service Providers Association (VASPA) has officially submitted a comprehensive consultation response to the Securities and Exchange Commission (SEC) regarding the recently published Proposed Rules on Digital and Virtual Asset Operations, Custody and Markets.
VASPA formally commends the SEC for the technical ambition and scope of the Proposed Rules. By consolidating the entire lifecycle of digital and virtual asset activity into a single framework, the SEC has demonstrated forward-thinking regulatory design. Standout provisions—such as the factor-based control test for decentralized finance (DeFi) protocols, the cold-storage requirements, the Real-World Asset Tokenisation Platform (RATOP) standards, and the innovative National Digital Assets Confiscation Wallet—place Nigeria’s framework in strong alignment with, and in some cases ahead of, global best practices.
In a spirit of constructive partnership, VASPA’s commentary identifies specific areas where the Proposed Rules can be refined to ensure jurisdictional clarity, international competitiveness, and operational viability for both established operators and domestic startups.
Key Thematic Areas & Recommendations
VASPA’s analysis focuses on six core themes, highlighting opportunities to strengthen the framework before finalization:
1. Regulatory Perimeter & The Stablecoin Question
Currently, the Proposed Rules extend comprehensive issuance and prudential reserve requirements to all stablecoins. VASPA notes that under the Presidential Executive Order on Virtual Assets Coordination, 2026, the Central Bank of Nigeria (CBN) holds primary jurisdiction over stablecoin issuance and reserve adequacy.
- Recommendation: Align the SEC’s stablecoin authority strictly with instruments structured or marketed as investment products, or limit its scope to assessing a stablecoin’s fitness for settling specific transactions within SEC-regulated capital markets..
2. Definitional Clarity & Security Classification
The framework leaves the fundamental test of what constitutes a “security” undefined. Because major compliance obligations and critical tax treatments (under the Nigeria Revenue Service) hinge on this determination, the absence of an objective standard creates market-wide uncertainty.
- Recommendation: Publish a non-exhaustive, multi-factor classification test to determine when a digital asset constitutes a security, enabling issuers to conduct reasoned self-assessments prior to filing.
3. Registration, Capital, Fees, and Governance
The Proposed Rules set minimum paid-up capital at ₦2 billion for Exchanges and Custodians, placing Nigeria among the highest fixed minimum capital requirements globally. Furthermore, the Accelerated Regulatory Incubation Programme (ARIP) currently lacks defined graduation criteria, leaving domestic entrants on a mandatory two-year incubation path while foreign entrants can bypass incubation entirely.
- Recommendation: Introduce dynamic, formula-based capital scaling (similar to the EU’s MiCA framework) and reserve the highest capital tiers exclusively for stablecoin issuance. Establish objective graduation criteria for ARIP to provide a faster route to full registration for compliant domestic firms.
4. Custody and Client Asset Protection
While the custody rules are robust, the strict requirement that 80% of assets be held in “cold storage” does not account for modern multi-party computation (MPC) technologies that provide equivalent security. Furthermore, statutory protections shielding client assets from insolvency proceedings are not self-executing under Nigerian corporate law.
- Recommendation: Introduce a periodic technical review mechanism for custody thresholds. Require Custodians to structure their documentation against the trust framework of the Companies and Allied Matters Act (CAMA) 2020 to ensure client assets are legally ring-fenced during a liquidation.
5. Consistency with Existing Capital Markets Frameworks
The Proposed Rules present significant deviations from the SEC’s existing Crowdfunding Rules regarding capital-raising limits and retail investor caps, allowing a lower-income investor to take on five times more exposure in digital assets than in traditional crowdfunding.
- Recommendation: Reconcile digital asset retail investment limits with the income-proportional standard currently utilized in the Crowdfunding Rules to ensure uniform investor protection across all regulated platforms.
6. Enforcement and Supervision
The current draft lacks a tailored administrative sanctions schedule, relying instead on general SEC rules that do not differentiate between minor record-keeping omissions and material custody failures.
- Recommendation: Publish a digital-asset-specific sanctions schedule, tiered by breach severity, and clearly outline the formal appeals pathway through the Investments and Securities Tribunal (IST).
Commitment to Co-Design
VASPA submits this commentary as a technical contribution from a dedicated industry partner. We draw on comparative insights from regulatory regimes in the European Union (MiCA), the UAE (VARA), Hong Kong, Singapore, and Kenya to offer solutions that are proportionate and globally aligned.
“The SEC has undertaken a genuinely difficult drafting task for a novel and fast-moving asset class,” stated the Policy & Regulatory Affairs Unit of VASPA. “We are confident that addressing these jurisdictional, definitional, and operational points will finalize a rulebook that protects investors while accelerating Nigeria’s position as a hub for digital asset innovation.”
VASPA remains available to engage in further technical consultations with the SEC prior to the final gazetting of the rules.
The complete submission, available here in PDF, has been delivered to the Director-General of the Securities and Exchange Commission through the Rules Committee of the Commission. To view the further response by VASPA, focusing on fees and registration gateways, click here.
Media Enquiries:
Policy & Regulatory Affairs Unit, VASPA
policy@vaspa.org
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