This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, financial institutions, companies, and governments. A new edition drops every Monday. When you buy cryptocurrencies such as Bitcoin or Ether on a local exchange, you are often trusting the platform with one simple task: to keep your funds safe. But what happens if the exchange is hacked, freezes withdrawals or suddenly shuts down?
Nigeria’s Securities and Exchange Commission (SEC) wants cryptocurrency companies to have better answers. Under proposed rules released on August 20, crypto exchanges and other digital asset firms would have to separate customer funds from their own, strengthen how they safeguard cryptocurrencies, and report major losses, cyber incidents, and other material operational failures to the regulator.
The framework, which is open for public comment, brings a rule already familiar in the traditional banking sector to the digital asset industry: when something goes wrong, the regulator expects to know about it quickly. Like banks, crypto firms would have to notify their regulator of certain incident reporting within 24 hours with further updates where necessary; the SEC’s proposal also requires digital asset firms to submit a detailed incident report within 48 hours.
The SEC is also proposing higher financial requirements for digital asset businesses. Digital Asset Exchanges and Digital Asset Custodians (DACs) would each need minimum paid-up capital of ₦2 billion ($1.5 million) while Digital Asset Platform Operators (DAPOs), Digital Asset Offering Platforms (DAOPs), and Real-World Asset Tokenisation Platforms (RATOPs) would require ₦500 million ($371,600). Virtual Asset Service Providers would require ₦200 million ($149,000). The proposal also requires a current fidelity insurance bond covering at least 25% of the applicable minimum paid-up capital.
The rules are aimed at strengthening investor protection and reducing the risk that customers lose access to their
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