NIGERIA Law and Practice Contributed by: Omoruyi Edoigiawerie, Adebomi Adekeye and Habeeb Eyinade, EandC Legal
• local incorporation – applicants must be incor- porated with the Corporate Affairs Commission (CAC); • initial assessment – issuers must submit a draft White Paper and a legal opinion to the SEC to determine the asset’s security status; and • full registration – upon a security determination, the entity must register as a digital asset exchange (DAX), offering platform (DAOP) or custodian (DAC). Substance and Local Personnel The SEC prohibits shell companies; applicants must maintain a physical office and a viable technical road- map. Key officers (CEO and Compliance Officer) must be SEC-registered sponsored individuals resident in Nigeria, possessing a university degree and at least five years’ cognate experience in finance or technol- ogy. Prudential Standards Following the 2026 recapitalisation, DAOPs require a minimum paid-up capital of NGN500 million, while DAXs and DACs must meet a NGN2 billion threshold. Firms must maintain a fidelity bond covering 25% of their minimum capital and demonstrate robust frame- works for cybersecurity (SOC2 equivalent), business continuity and internal audit as a prerequisite for licensing. 3.3 Change of Control Change-of-control requirements for digital asset firms in Nigeria are governed by the ISA 2025 and the SEC Rules on Digital Assets. As these firms are classified as capital market operators, any structural change in ownership is subject to a rigorous fit-and-proper review. Key requirements include the following. • Any acquisition of a substantial shareholder stake (5% or more) requires prior written approval from the SEC. • Applicants must disclose the ultimate beneficial owners and verify the source of funds. New direc-
tors must undergo a background audit to meet the integrity standards of sponsored individuals. • Post-approval, firms must update the CAC and notify the SEC within 14 days. Unauthorised changes in control are viewed as fun- damental breaches, carrying administrative fines and the potential for licence revocation. 3.4 Passporting There is currently no formal passporting regime for digital asset licences in Nigeria. While the SEC is a signatory to the IOSCO Multilateral Memorandum of Understanding (MMoU), this facilitates regulatory co- operation and information exchange rather than the automatic cross-border recognition of licences. However, Nigeria is increasingly central to regional harmonisation efforts. Under the ISA 2025, the SEC may recognise foreign VASPs if a reciprocal arrange- ment exists and the entity meets local fit-and-proper standards. Moreover, recent 2026 initiatives by ECO- WAS aim to harmonise digital regulations – while not yet a full passport, a Nigerian licence serves as a high-standard benchmark, significantly easing the no-objection process in neighbouring West African jurisdictions. Nigeria asserts strict jurisdiction over cross-border digital asset services using a targeting test. Under the ISA 2025 and the SEC Rules on Digital Assets, any offshore entity soliciting Nigerian residents is subject to local regulatory mandates. Restrictions and Approval Requirements Registration mandate No foreign entity may provide VASP services in Nigeria without SEC registration or formal recognition. Active targeting, evidenced by naira-denominated pairs, local marketing or NGN-specific payment gateways, triggers an immediate requirement for local incorpo- ration. 4. Cross-Border Services 4.1 Marketing
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