SiBAN counters SEC’s new capital requirement for digital asset companies

The Nigerian digital asset ecosystem is at the crossroads following the Securities and Exchange Commission’s (SEC) introduction of new capital requirements for digital asset companies; the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) has submitted a detailed position paper.

While the association acknowledges the SEC’s intent to bolster market integrity and investor protection, it argues that the current “one-size-fits-all” approach and the 18-month implementation window could stifle indigenous innovation and hand market dominance to foreign entities.

The most significant friction point is the blanket capital requirement. In its paper, SiBAN argues that treating a micro-startup building foundational code the same as a global exchange is a recipe for ecosystem collapse.

Instead, the association is pushing for a staggered capital threshold system, a three-tier model designed to protect the little guy while ensuring the big players are properly capitalised.

1. Tier 1 (Innovation Track): ₦50 million to ₦200 million for startups and pilot-stage platforms

2. Tier 2 (Growth Track): ₦200 million to ₦500 million for platforms demonstrating operational viability.

3. Tier 3 (Institutional Track): ₦500 million and above for established platforms managing significant public funds.

SiBAN President Barr. Mela Claude Ake argues that this isn’t just about lower numbers; it’s about economic honesty.

“If we’re honest, we know that African businesses are starved of requisite capital,” Ake notes. “What that means is that we must factor in these unique circumstances when creating policies. The innovation track or tier allows for innovators with spare capital to still participate in the market and contribute to innovation at the level their capital allows, with a regulatory cap on their activities and portfolio.”

SEC 2027 deadline: A race against global deep pockets

The SEC’s current 18-month window is, in SiBAN’s view, a dangerously optimistic timeline. The association is instead proposing a phased implementation that stretches into 2028. This isn’t just a request for more breathing room; it’s a tactical necessity for survival.

According to Ake, the 18-month window ignores the gruelling reality of fundraising in the current climate.

Barrister Mela Claude Ake, SiBAN president 

“It’s insufficient because realistically the players in the sector need more time to do the necessary groundwork towards deepening the capacity to meet the new capital requirements, which I made clear are quite an astronomical increase from the previous capital requirements,” Ake explains.

He highlights a nightmare scenario for local founders:

“There will need to be conversations with partners and prospective investors, and we must take into account that some of these negotiations may stall or fall through, and fresh negotiations with alternative prospects would have to be commenced, which would in turn have their own trajectory. In the interim, foreign players with deeper pockets and having a foreign exchange that puts them at an advantage could swoop in, meet all the demands in three months and dominate the market.”

Bridging the consultative gap

The position paper doesn’t just critique; it offers a roadmap for collaboration. SiBAN suggests the creation of a Digital Asset Regulatory Working Group. This would bring the SEC, SiBAN, the CBN, and NITDA to the same table, moving away from a top-down regulatory approach toward a collaborative framework where technical expertise meets policy design.

Furthermore, SiBAN is encouraging “Alternative Compliance Pathways,” urging smaller players to consider mergers, acquisitions, and “Venture Studio” models where multiple startups can share compliance infrastructure under a single institutional umbrella.

SiBAN’s message to the SEC is a plea for balance. While the association embraces the opportunity to strengthen institutional frameworks, it insists that the price of regulation should not be the death of indigenous entrepreneurship. 

If the SEC adopts the proposed multi-tiered framework and extends the timeline to 2028, it has a chance to solidify Nigeria’s position as Africa’s blockchain vanguard. If it doesn’t, it may find that it has regulated an industry that no longer belongs to Nigerians.

Also read: Virtual Asset Association launches Project Green-White-Green to unlock Nigeria’s $1 trillion economy

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