NIGERIA Law and Practice Contributed by: Omoruyi Edoigiawerie, Adebomi Adekeye and Habeeb Eyinade, EandC Legal
• Regulated firms must ensure that crypto-asset exposure is appropriately risk-weighted. Under the 2026 SEC Prudential Guidelines, firms with sig- nificant digital asset exposure may be required to maintain higher liquid capital ratios to offset market volatility. • Funds cannot self-custody their digital assets. They are mandated to use an SEC-licensed digital asset custodian (DAC) that meets the 2026 NGN2 billion capital requirement. Failure to use a licensed custodian is a ground for immediate licence sus- pension. • Funds must adopt standardised valuation method- ologies. The SEC now requires real-time net asset value (NAV) transparency for digital asset funds to prevent the “stale pricing” risks seen in previous cycles. • Non-compliance results in tiered sanctions: (a) administrative – fines for reporting failures; (b) operational – immediate Post-No-Debit orders on bank accounts via the CBN for AML/CFT breaches; and (c) structural – mandatory divestment or the forced wind-down of the fund for unlicensed exposure. In the 2026 landscape, the legal wrapper is primarily used for tax efficiency and investor protection rather than regulatory avoidance. 2.4 Token Issuance Nigeria maintains a viable but strictly supervised industry for digital asset offerings. Under the ISA 2025, the launch of a token is treated with the same regulatory gravity as an initial public offering (IPO). Key Requirements for Launch Before any public solicitation, issuers must file an ini- tial assessment with the SEC. The burden of proof lies with the issuer to demonstrate whether a token is a security or a utility. Under SEC Rule 7.0 (2025), an issuer’s fundraising is capped at 20 times its shareholders’ funds, sub- ject to an overall ceiling of NGN10 billion within any 12-month period.
Token issuers (as digital asset platform operators) must now meet a NGN500 million minimum capital requirement as of 2026. Furthermore, the offering must be hosted on an SEC-registered digital asset offering platform (DAOP), with assets held by a licensed digital asset custodian (DAC). To protect the retail market, individual non-accredited investors are capped at NGN200,000 per issuer and an aggregate of NGN2 million per year. There are no such limits for institutional or high net worth individu- als (HNWIs). White Paper and Disclosure Requirements Disclosure is the cornerstone of the Nigerian regime. A White Paper is not merely a marketing document; it is a legal prospectus subject to liability for misstate- ments under Section 162 of the ISA 2025. Critical disclosure components These include the following: • a detailed schematic of the system architecture, blockchain protocol, and cybersecurity security protocols (including a Disaster Recovery Plan); • clear disclosure of the supply schedule, burn mechanisms, and the governance rights of token holders; • the SEC mandates that the issuer’s directors and senior management must collectively hold at least 50% equity in the project at the date of issuance to ensure a structural alignment of interests; and • every filing must include a formal legal opinion con- firming that all applicable permits for the issuance and subsequent transfer of the assets have been obtained under Nigerian law. 2.5 Market Abuse Framework and Prohibited Behaviour The ISA 2025 provides a comprehensive statutory framework for market integrity. It explicitly prohibits behaviours that distort the fair and efficient price dis- covery process, such as: • market manipulation – including wash trading, front-running, and pump-and-dump schemes; • insider dealing – trading on non-public, price-sen- sitive information;
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