VASP Licensing in Nigeria: Requirements and Process for Crypto Businesses
VASP License Cost Calculator
VASP License Cost Calculator
Calculate your estimated total cost to obtain a VASP license in Nigeria
Estimated Total Cost
What Is a VASP License in Nigeria?
A VASP (Virtual Asset Service Provider) license in Nigeria is the only legal way for crypto businesses to operate after the 2025 Investments and Securities Act. Before this law, Nigerian crypto firms worked in a gray zone-no official oversight, no banking access, and constant risk of shutdowns. Now, the Securities and Exchange Commission (SEC) requires every company offering crypto services to get licensed. That includes exchanges, wallet providers, staking platforms, mining operations, and even businesses that accept crypto as payment.
If you’re running a crypto business in Nigeria and don’t have a VASP license, you’re operating illegally. The SEC doesn’t just want paperwork-they want real, accountable companies with real money, real offices, and real people on the ground.
Who Needs a VASP License?
The list of regulated activities is broad. If your business does any of these, you need a license:
- Buying, selling, or trading cryptocurrencies like Bitcoin or Ethereum
- Hosting digital wallets for customers (custodial wallets)
- Running staking services where users earn rewards by locking up crypto
- Issuing or selling tokens (including NFTs if they’re treated as securities)
- Operating crypto mining farms
- Distributing airdrops or token giveaways
- Processing payments in crypto for goods or services
Even if you’re a small startup, if you touch virtual assets in any of these ways, the SEC considers you a VASP. There are no exceptions for size or revenue.
Minimum Capital Requirement: N500 Million
One of the biggest hurdles for new crypto firms is the capital requirement. The SEC demands a minimum paid-up capital of N500,000,000 (about $325,000 USD). This isn’t a suggestion-it’s a hard rule. You must prove you have this money in a Nigerian bank account, locked and ready for audit.
This requirement is among the highest in Africa and rivals some EU countries. It’s meant to keep out fly-by-night operators and ensure only serious, well-funded companies can enter the market. For many startups, this is a dealbreaker. Some have tried to raise funds through token sales, but the SEC won’t accept crypto as capital-you need actual Naira or foreign currency deposited in a Nigerian bank.
Corporate Registration and Physical Presence
You can’t just register a company online and call it a day. The SEC requires:
- A company registered with the Corporate Affairs Commission (CAC)
- A valid Certificate of Incorporation
- Memorandum and Articles of Association (MEMART)
- A current status report from CAC
But here’s the catch: you must have a physical office in Nigeria. No virtual offices, no co-working spaces with a mailbox. You need a real address where your business operates daily. And one of your directors must be a Nigerian resident-someone who lives in the country and can be held accountable by regulators.
This rule targets foreign crypto firms that used to operate remotely. Now, if you’re a U.S.-based exchange wanting to serve Nigerian customers, you can’t just set up a website and collect Naira. You need a local entity, a local director, and a local office.
Documentation: What You Must Submit
The SEC doesn’t just want proof of money and a physical address. You need a full operational blueprint:
- Latest audited financial statements (or a statement of affairs if you’re new)
- A detailed business model explaining your services, target market, and revenue plan
- Full KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures
- Customer protection policies, conflict of interest rules, and dispute resolution processes
- Technical infrastructure details: cybersecurity systems, data encryption, backup protocols
- Staffing plan: names, roles, and qualifications of key personnel
- Letters of no objection from other regulators (if you’re also in banking, fintech, or payments)
Every document must be signed, stamped, and notarized. The SEC will check for consistency. If your business model says you’ll serve retail users, but your KYC system only works for institutions, your application gets rejected.
The Accelerated Regulatory Incubation Program (ARIP)
If the full license feels overwhelming, the SEC offers the Accelerated Regulatory Incubation Program (ARIP). This is a 12-month pilot path for startups that are serious but not yet ready for full compliance.
Here’s how ARIP works:
- You apply with basic documents: CAC registration, proof of Nigerian office, and a clear business plan
- SEC gives you preliminary approval to operate under supervision
- You must submit quarterly progress reports
- At month 10, the SEC reviews your progress and gives feedback
- At month 12, you either get full VASP license or must shut down
ARIP isn’t a shortcut-it’s a training ground. You still need to meet all the same standards, but you get time and guidance. Many fintech startups use ARIP to build their systems before going live. But remember: you can’t raise funds or charge fees during ARIP unless the SEC explicitly allows it.
Compliance: KYC, AML, and Record Keeping
Once licensed, you’re under constant watch. The SEC and Central Bank of Nigeria (CBN) require strict compliance with:
- KYC: Every customer must provide government-issued ID, proof of address, and a selfie. Biometric verification is recommended.
- AML: You must monitor all transactions for suspicious patterns. Large, rapid transfers, multiple small deposits from different accounts, or transactions with high-risk jurisdictions trigger alerts.
- Record retention: You must keep all customer data, transaction logs, and communications for at least seven years. That’s longer than most banks.
- Reporting: You must file Suspicious Transaction Reports (STRs) with the Nigerian Financial Intelligence Unit (NFIU) within 72 hours of detection.
Failing to report a suspicious transaction can lead to fines, suspension, or revocation of your license. The SEC has already penalized several platforms for weak monitoring systems.
Technology and Security Requirements
Security isn’t optional. The SEC’s Technology Risk Management Guidelines demand:
- Two-factor authentication for all user accounts
- Cold storage for at least 90% of customer crypto assets
- Regular penetration testing by certified third-party auditors
- Encryption of all data at rest and in transit
- Disaster recovery plan with offsite backups
- System uptime of at least 99.5% annually
Many crypto firms thought they could use third-party APIs for security. The SEC says no-you must control your own infrastructure. You can’t outsource your responsibility.
Costs and Hidden Expenses
Getting the license isn’t just about the N500 million capital. You’ll spend more on:
- Legal fees for documentation: N1.5-3 million
- Auditor fees for financial statements: N1-2 million
- IT security setup: N5-15 million (depending on scale)
- Staff salaries for compliance officers: N500,000-1 million per person monthly
- Annual renewal fees: N250,000
For a small exchange, total setup costs can hit N20 million ($13,000 USD) before you even start serving customers. That’s why many small operators have shut down or moved offshore.
What Happens If You Don’t Apply?
The SEC has already started shutting down unlicensed platforms. In early 2025, three major peer-to-peer trading apps were blocked by Nigerian ISPs. Bank accounts linked to unlicensed VASPs were frozen. Customers lost access to their funds.
There’s no grace period. If you’re operating without a license after January 1, 2025, you’re breaking the law. The SEC can refer cases to the Nigerian Police Force for criminal prosecution. Fines can reach up to N1 billion, and directors can face jail time.
Why This Matters for Nigeria’s Crypto Future
Nigeria was once the biggest crypto market in Africa-driven by P2P trading, remittances, and youth adoption. The old system was chaotic but alive. The new system is controlled, but stable.
For licensed firms, this means access to banks, partnerships with fintechs, and investor confidence. For users, it means safer wallets and clearer rules. For the government, it means more tax revenue-crypto transactions are now trackable, and the goal is to raise tax collection from under 10% of GDP to 18% by 2027.
But it’s not perfect. High costs have pushed many innovators out. Some say it’s over-regulation. Others say it’s the only way to protect consumers in a market flooded with scams.
Next Steps for Crypto Businesses
If you’re ready to apply:
- Register your company with CAC
- Open a corporate bank account in Nigeria
- Secure N500 million in paid-up capital
- Set up a physical office with a Nigerian resident director
- Build your KYC/AML system and cybersecurity infrastructure
- Prepare all documentation
- Apply via the SEC’s online portal or through ARIP
Don’t wait. The SEC is reviewing applications faster than ever. But they’re rejecting more too-because the bar is high, and they’re serious.
What’s Next for VASP Regulation in Nigeria?
The 2025 law is just the beginning. The SEC is expected to release detailed operational guidelines in 2026, covering:
- How to handle cross-border crypto transfers
- Rules for decentralized finance (DeFi) protocols
- Clarification on NFTs and tokenized assets
- Potential adjustments to capital requirements based on business type
Nigeria is setting a standard for Africa. Other countries are watching. If you want to scale across West Africa, getting your VASP license right now isn’t just about compliance-it’s about being ready for the future.
Can a foreign company get a VASP license in Nigeria?
Yes, but only if they set up a Nigerian subsidiary. The SEC requires a local legal entity registered with the Corporate Affairs Commission (CAC), a physical office in Nigeria, and a resident director. Foreign companies cannot operate under their overseas registration.
Is the N500 million capital requirement in Naira or USD?
The requirement is in Nigerian Naira (N500,000,000). However, you can deposit foreign currency converted to Naira at the official exchange rate. The SEC will verify the source of funds and may require proof of conversion from a licensed Nigerian bank.
Can I use cryptocurrency to meet the capital requirement?
No. The SEC requires paid-up capital in fiat currency-either Naira or foreign currency deposited in a Nigerian bank. Crypto assets cannot be used as capital because they are considered volatile and not legally recognized as legal tender in Nigeria.
How long does the VASP licensing process take?
The standard process takes 4-6 months if all documents are complete. The ARIP program takes 12 months but allows you to operate under supervision during that time. Delays usually happen when documentation is incomplete or if the SEC requests additional information.
What happens if my VASP license is revoked?
If your license is revoked, you must immediately stop all virtual asset services. You’re required to return customer funds within 30 days and submit a final compliance report. Failure to comply can result in criminal charges, asset freezes, and blacklisting from future applications.
Do I need separate licenses for different services like exchange and staking?
No. A single VASP license covers all virtual asset services listed under the 2025 Act. You can offer trading, staking, custody, and payment processing under one license. However, you must disclose all services in your application and maintain separate compliance protocols for each.
Janna Preston
November 7, 2025 AT 16:30Wait, so you need half a billion Naira just to start? That’s insane. How’s a small team with a good idea supposed to compete with big players? This feels less like regulation and more like a pay-to-play system.
Alexa Huffman
November 8, 2025 AT 05:34Actually, this is pretty standard for emerging markets trying to clean up crypto chaos. Nigeria’s move is bold, but necessary. Look at how many scams ran rampant before this. Safety over speed, always.
andrew seeby
November 9, 2025 AT 18:25lol imagine having to have a physical office just to sell crypto... 🤡
Noah Roelofsn
November 11, 2025 AT 04:01Let’s not romanticize the gray zone. Before 2025, Nigerian crypto users were sitting on a landmine-no recourse, no insurance, no accountability. The SEC isn’t being cruel; they’re building a foundation. The N500M cap? Brutal, yes-but it filters out the grifters who’d vanish with your life savings.
And cold storage? 90%? That’s not optional, it’s gospel. I’ve seen too many ‘decentralized’ platforms get hacked because they kept hot wallets with 80% of funds. This isn’t overreach-it’s damage control.
Yes, the cost kills small startups. But ARIP? That’s the real innovation. It’s not a loophole-it’s a scaffold. Give them 12 months to build, test, and prove they’re not just another Telegram bot with a whitepaper.
And let’s be real: if you’re a foreign exchange trying to tap into Nigeria’s 200M+ population without a local entity, you’re not a disruptor-you’re a parasite. This law forces responsibility. You want access to the market? Then live in it. Pay taxes. Hire locals. Answer to regulators.
The seven-year record retention? Overkill? Maybe. But when your aunt loses her life savings to a fake staking site, you don’t want to be scrambling for logs. This is the kind of rigor that builds trust.
And yes, crypto can’t be capital? Of course not. You can’t build a bank on volatile assets. The SEC isn’t anti-crypto-they’re anti-chaos. And Nigeria? They’re leading Africa into the future, not just copying EU or US playbooks.
This isn’t the end of innovation. It’s the beginning of sustainable innovation.
Vivian Efthimiopoulou
November 12, 2025 AT 15:16One cannot help but reflect upon the philosophical underpinnings of this regulatory framework. The state, in its infinite wisdom, has chosen to impose a materialistic criterion-capital-as the gatekeeper to participation in a fundamentally decentralized ethos. Is it not ironic that the very technology born to liberate from centralized control is now shackled by the most traditional of state apparatuses? The N500 million requirement is not merely a financial threshold-it is a symbolic altar upon which the ideals of financial sovereignty are sacrificed in the name of order.
And yet… one must concede that chaos, too, has its costs. The unregulated P2P markets of 2023-thriving, vibrant, but riddled with fraud-left thousands destitute, their digital assets vaporized by shadowy operators who vanished with the wind. The SEC’s intervention, however heavy-handed, may be the necessary tragedy that prevents the collapse of an entire generation’s trust in digital finance.
Consider the resident director requirement. Is this not an assertion of national identity? A declaration: ‘This is not your offshore shell company. This is Nigeria. You are here, among us, accountable to us.’ It is a quiet revolution in governance-where jurisdiction is not determined by IP address, but by presence, by soil, by human connection.
And what of ARIP? Ah, here is the most humane element. Not punishment, but apprenticeship. Not exclusion, but mentorship. A 12-month incubation where startups are not cast into the abyss, but guided through the fire. This is not regulation as control-it is regulation as cultivation.
Yet, one cannot ignore the silent exodus: the developers who now operate from Ghana, from Dubai, from Berlin. The cost of compliance is not merely financial-it is cultural. It is the death of the lone coder in a Lagos apartment, building something beautiful, only to be told: ‘You cannot exist here unless you have a boardroom and a corporate bank statement.’
Perhaps the true question is not whether this is right-but whether it is inevitable. In a world where every digital act is tracked, taxed, and traced, is decentralization merely a romantic memory? Or can Nigeria, in its rigid structure, become the unlikely cradle of a new kind of crypto-responsible, grounded, and truly inclusive?
I do not know the answer. But I am watching.
Becca Robins
November 12, 2025 AT 22:47so like... u need a physical office?? lmao why not just make us all wear suits and bring a coffee machine too 🤦♀️
also n500m?? bro i'm 22 and i got $200 in my crypto wallet and u want me to buy a building?? 😭
also can i just pay in dogecoin?? 🐶
gerald buddiman
November 13, 2025 AT 09:57Can we talk about how ridiculous this is? You need a Nigerian resident director? So if I’m a U.S.-based team with a great product, I have to hire some random guy in Abuja just so the SEC can point at him if something goes wrong? That’s not accountability-that’s scapegoating.
And cold storage? 90%? Fine. But who audits that? And how do you prove it? Do they send inspectors with flash drives to your vault? This isn’t regulation-it’s theater.
And don’t even get me started on the seven-year retention. Who keeps records that long? Banks? Maybe. But a startup? We’re barely keeping our own receipts. This isn’t protecting users-it’s burying innovation under paperwork.
And the fact that you can’t use crypto as capital? That’s the biggest joke. You’re telling me Bitcoin is too volatile to be capital… but you’re letting banks hold billions in Naira that’s losing 40% of its value a year? Double standard.
Look-I get the scams. I do. But this isn’t fixing scams. It’s building a fortress around a dying industry. And the people who actually want to build? They’re getting pushed out. The SEC isn’t protecting consumers. They’re protecting the status quo.
And now we’re supposed to be grateful?
Arjun Ullas
November 14, 2025 AT 22:04As a financial compliance professional based in India, I must commend the Nigerian Securities and Exchange Commission for its rigor and foresight. The VASP licensing framework is among the most comprehensive in the Global South. The capital requirement, while stringent, ensures systemic resilience. Many African nations have attempted token-based regulation-resulting in regulatory arbitrage and investor losses. Nigeria has chosen substance over symbolism.
The physical office requirement is not excessive-it is a deterrent to shell companies that have long exploited jurisdictional gaps. The ARIP program is a masterstroke: it allows innovation to breathe while maintaining oversight. This is not overregulation-it is responsible innovation.
Moreover, the emphasis on KYC/AML and seven-year record retention aligns with FATF recommendations and global best practices. The fact that Nigeria enforces these standards without external pressure speaks volumes about its institutional maturity.
To those who cry ‘overreach’-ask yourself: would you entrust your life savings to a platform that has no physical address, no local director, and no accountability? If the answer is no, then you support this regulation-even if you do not admit it.
This is not the end of crypto in Nigeria. It is the beginning of its legitimacy.
Steven Lam
November 15, 2025 AT 10:07Who cares about all this paperwork? Crypto is supposed to be free. The government shouldn't be able to tell you how much money you need to have to trade bitcoin. This is communism with a tech twist
They should just leave us alone
Why do they even care? Its just money