In 2025, Nigeria is a top African hub for cryptocurrency, fueled by Naira depreciation, high inflation, and an increasing army of tech-savvy youth. Ranking second globally in peer-to-peer Bitcoin trading, Nigeria’s crypto market is booming. The Investment and Securities Act (ISA) 2025 now recognizes cryptocurrencies as securities, placing them under the Securities and Exchange Commission (SEC). This brief guide explores Nigeria’s crypto regulations, compliance requirements, tax rules, risks, and opportunities for businesses and investors.
Evolution of Crypto Regulation in Nigeria
Nigeria’s crypto journey has been cautious but progressive. In 2021, the Central Bank of Nigeria (CBN) banned banks from handling crypto transactions, citing risks like money laundering and capital flight. This pushed users to peer-to-peer platforms, yet crypto adoption soared, making Nigeria a global leader.
In December 2023, the CBN reversed the ban, allowing Virtual Asset Service Providers (VASPs) to open bank accounts under strict anti-money laundering (AML) and know-your-customer (KYC) rules. This shift aimed to boost financial inclusion while controlling risks.
The Investment and Securities Act 2025, signed by President Bola Ahmed Tinubu, replaced the 2007 Act. It classifies cryptocurrencies, tokens, and digital assets as securities, empowering the Securities and Exchange Commission (SEC) to regulate exchanges, wallets, Decentralized Finance (DeFi) platforms, and stablecoins. In January 2025, the SEC tightened crypto marketing rules, mandating certain disclosures and banning misleading promotions.
Nigeria’s 2025 Crypto Regulatory Framework: The joint roles of the CBN and SEC.
SEC’s Role: The SEC licenses all VASPs, including exchanges and custodians. The ISA 2025 requires stablecoin issuers to hold verifiable reserves, undergo audits, and follow AML standards. Platforms must register, enforce KYC, and report transactions to prevent fraud. Updated 2025 SEC guidelines also regulate initial coin offerings (ICOs) and token sales.
CBN’s Guidelines: The CBN ensures financial stability, overseeing VASP banking integrations. Cash transactions over N5 million fall under the Money Laundering Act 2022, and international transfers above US$10,000 require declaration. This framework aims to curb capital outflows and integrate crypto into Nigeria’s economy, as noted in a 2025 IMF report.
Legal Implications of Nigeria’s Crypto Laws
The 2025 regulations impact businesses, investors, and compliance in a number of ways.
Compliance Requirements
VASPs must comply with the Money Laundering Act 2022, with the risk of fines or jail term for violations. This includes monitoring transactions, reporting suspicious activities, and providing AML/CFT training. Unlicensed platforms are liable to being shutdown. Businesses also face liabilities for data breaches or misleading investors under the ISA 2025.
Tax Obligations
The Finance Act 2023 treats cryptocurrencies as property, with a 10% Capital Gains Tax (CGT) on disposals. Income from mining or trading is taxed at 7% to 24%, based on earnings. The 2025 rules strengthen reporting and allow deductions for losses while non-complying participants face the risk of audits, penalties, or tax evasion charges.
Risks and Liabilities
While the regulations legitimize crypto, these transactions are yet fraught with challenges. High compliance costs may stifle innovation, and fraud remains a major concern, with the SEC on a constant campaign against unlicensed operators. Investors face market volatility and limited protections, while cross-border transactions may trigger global AML scrutiny. These and more have influenced recent discussions and the call for clearer crypto legislation in Nigeria’s National Assembly. It is important, in light of all these, for businesses to seek legal counsel while attempting to traverse the dual regulatory terrain.
Challenges and Future of Crypto in Nigeria
While Nigeria has made strides in regulating cryptocurrency, significant hurdles remain. Conflicting guidelines from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have led to regulatory ambiguity, complicating compliance for businesses and investors. Enforcement across the country is still inconsistent, and many crypto-related cybercrimes go underreported, increasing systemic risk.
Nonetheless, the SEC’s endorsement of stablecoins in July 2025 signals a commitment to innovation and deeper integration with global financial systems. Industry advocates continue to call for a unified regulatory framework, one that could streamline oversight and attract greater foreign investment.
Conclusion: Balancing Crypto Growth and Regulation
The ISA 2025 positions Nigeria as Africa’s regulated crypto leader, boosting investor confidence while tackling risks like money laundering and tax evasion. Compliance (licensing, AML adherence, and tax reporting) is critical for businesses and investors. Staying updated on SEC and CBN rules is also essential as Nigeria’s crypto market grows. If you intend to invest in crytocurrencies, it is important to consult a digital asset legal expert for guidance.
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