The Securities and Exchange Commission (SEC) has proposed a N30 million registration fee and a minimum capital requirement of N2 billion for digital asset exchanges and custodians operating in Nigeria.

The proposals are contained in the commission’s draft rules on “Digital and Virtual Asset Operations, Custody and Markets”, released on August 20.

Under the proposed framework, digital asset exchanges (DAXs), digital asset custodians (DACs), digital asset platform operators (DAPOs), digital asset offering platforms (DAOPs) and real-world asset tokenization platforms (RATOPs) would each pay a N30 million registration fee.

The SEC also proposed varying minimum capital requirements for operators. DAXs and DACs would each require N2 billion, while DAPOs, DAOPs and RATOPs would require N500 million each.

Virtual asset service providers (VASPs), meanwhile, would be required to maintain a minimum capital of N200 million, with applicants paying a N100,000 processing fee and a N300,000 application fee.

The commission also proposed that regulated entities maintain a fidelity insurance bond covering at least 25 per cent of their minimum paid-up capital.

For entities seeking to operate under the Accelerated Regulatory Incubation Programme (ARIP), the SEC proposed a N200,000 initial assessment fee and a N2 million application fee.

The draft framework further introduced ongoing supervisory charges linked to the turnover of regulated entities.

Under ARIP, a digital asset exchange would pay a supervisory fee of 0.015 per cent of adjusted turnover, while other entities would pay 0.0075 per cent.

Following full registration, the supervisory fee would rise to 0.025 per cent of adjusted turnover for DAXs and 0.015 per cent for other regulated entities.

According to the SEC, a fully registered digital asset exchange “shall pay a supervisory fee of 0.025% of adjusted turnover, payable quarterly or at such frequency as may be prescribed by the Commission”.

The commission added that other regulated entities under full registration would pay a supervisory fee of 0.015 per cent of adjusted turnover, payable quarterly or at such frequency as it prescribed.

The SEC also proposed limits on retail investors’ participation in digital asset offerings. Under the draft rules, a retail investor would not be allowed to invest more than N1 million per issuer or N10 million in aggregate across digital asset offerings within any 12-month period, unless the commission prescribes otherwise.

Where a retail investor seeks to invest more than N1 million or five per cent of the investor’s net worth, whichever is higher, in a digital asset offering, the platform would be required to meet additional investor-protection conditions before accepting the investment.

These include providing the investor with a prominent risk warning, obtaining the investor’s express consent to proceed and confirming that the investor understands the nature of the investment and the material risks involved.

The platform would also be required to assess whether the investment was appropriate for the investor, taking into account the investor’s knowledge, experience, financial circumstances and ability to bear potential losses.