In a groundbreaking development for Africa’s largest economy, Nigeria has officially classified cryptocurrencies and other digital assets as securities under its revised capital market legislation. The enactment of the Investments and Securities Act (ISA) 2024 marks a pivotal moment in the nation’s financial evolution, signaling a clear shift from resistance to regulation and innovation in the digital asset space.
This legal transformation not only legitimizes virtual assets within Nigeria’s formal financial system but also positions the country as a forward-thinking leader in blockchain adoption across the continent.
A New Era for Digital Assets in Nigeria
President Bola Tinubu recently signed the ISA 2024 into law, replacing the outdated Investments and Securities Act No. 29 of 2007. For the first time, the new legislation explicitly recognizes virtual assets, digital tokens, and investment contracts as securities, bringing them under the regulatory oversight of the Securities and Exchange Commission (SEC) Nigeria.
👉 Discover how this regulatory shift opens new doors for digital investors.
This means that all Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges must now register with the SEC and adhere to strict compliance standards. The goal is to eliminate fraud, protect investors, and create a transparent environment conducive to innovation and investment.
Emomotimi Agama, Director-General of SEC Nigeria, hailed the law as a “transformative step” that will strengthen investor confidence and attract both local and foreign capital into Nigeria’s evolving digital economy.
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market,” said Agama. “By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently, and reposition Nigeria as a competitive destination for investments.”
From Ban to Regulation: Nigeria’s Crypto Journey
Nigeria’s relationship with cryptocurrency has been turbulent. In the mid-2010s, as oil prices collapsed and the naira depreciated, many Nigerians turned to Bitcoin and other digital currencies as a hedge against inflation and currency instability. This grassroots adoption propelled Nigeria to become the second-largest holder of cryptocurrencies globally, trailing only the United States.
However, the Central Bank of Nigeria (CBN) responded with alarm. In 2021, it issued a directive banning banks from facilitating cryptocurrency transactions, effectively pushing trading underground. Users adapted quickly, relying on peer-to-peer (P2P) platforms like Binance to continue buying and selling digital assets outside traditional banking channels.
The turning point came in 2023 when President Tinubu appointed Olayemi Cardoso as CBN governor, marking a clear policy pivot toward engagement rather than suppression. The ISA 2024 is the legislative culmination of this shift—replacing fear with framework, and prohibition with protection.
Modernizing Nigeria’s Capital Market Framework
Beyond crypto recognition, the ISA 2024 introduces sweeping reforms designed to align Nigeria’s financial markets with global best practices. These include:
- Classification of Securities Exchanges: The Act distinguishes between Composite Exchanges (where all types of securities can be traded) and Non-composite Exchanges (focused on specific asset classes), enabling greater specialization and efficiency.
- Regulation of Commodities Exchanges: A new section establishes a legal framework for commodities trading and warehouse receipts, unlocking potential in agricultural and industrial sectors.
- Sub-national Issuance of Securities: State governments and agencies can now raise funds through the capital market, increasing fiscal flexibility and infrastructure financing options.
- Legal Entity Identifiers (LEIs): Mandatory use of LEIs enhances transparency by uniquely identifying parties in securities transactions.
- Systemic Risk Management: Provisions allow for monitoring and mitigation of risks that could destabilize the broader financial system.
- Enforcement Against Fraud: Ponzi schemes and illegal investment programs are explicitly prohibited, with severe penalties—including imprisonment—for violators.
These updates ensure that Nigeria’s regulatory framework meets international standards set by organizations like the International Organization of Securities Commissions (IOSCO), helping SEC Nigeria maintain its “Signatory A” status under the EMMoU agreement.
Industry Leaders Applaud Legislative Progress
Stakeholders across Nigeria’s financial sector have welcomed the reforms.
Oluropo Dada, President of the Chartered Institute of Stockbrokers (CIS), described the ISA 2024 as “a testament to our collective dedication to advancing the capital market.” He emphasized its role in fostering transparency, efficiency, and long-term economic growth.
Sam Onukwue, Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), called the law “transformative,” noting it will expand opportunities beyond traditional equities and fixed income products.
Eguarekhide Longe, Managing Director of NASD, highlighted the importance of modernizing regulations to attract younger investors and support digital financial products.
Akin Akeredolu-Ale of Lagos Commodities and Futures Exchange stressed that a strong legal foundation is essential for economic growth: “The capital market is the barometer of the economy—and this law strengthens its foundation.”
👉 See how global investors are responding to Nigeria’s crypto regulation.
Frequently Asked Questions (FAQ)
Q: What does it mean for cryptocurrencies to be classified as securities?
A: It means digital assets like Bitcoin or Ethereum tokens may be subject to disclosure requirements, investor protection rules, and regulatory oversight similar to stocks or bonds if they meet certain criteria (e.g., being part of an investment contract).
Q: Do individuals need to register with SEC to hold crypto?
A: No—individual ownership is not affected. Registration applies only to businesses offering crypto services, exchanges, or investment products involving digital assets.
Q: How will this affect crypto trading in Nigeria?
A: Trading will become more secure and transparent. Licensed platforms must follow anti-fraud, anti-money laundering (AML), and know-your-customer (KYC) protocols, reducing scams and boosting trust.
Q: Does this make crypto legal in Nigeria?
A: While not previously illegal, crypto lacked clear legal status. Now, it's formally recognized within the capital market framework, giving it legitimacy and regulatory clarity.
Q: Will this lead to taxes on crypto gains?
A: While not directly stated in ISA 2024, formal recognition often precedes tax frameworks. Investors should anticipate future guidance from tax authorities.
Q: Can state governments issue crypto-based bonds now?
A: Not directly—but they can issue traditional securities through digital platforms. Future innovations like tokenized bonds may emerge under this enabling legal environment.
Looking Ahead: Innovation Meets Oversight
The ISA 2024 is more than a regulatory update—it’s a strategic vision for Nigeria’s financial future. By embracing blockchain technology and digital assets within a structured legal framework, Nigeria is paving the way for fintech innovation, youth-driven entrepreneurship, and deeper capital market participation.
As global interest in decentralized finance grows, Nigeria’s proactive stance could inspire other African nations to follow suit—turning regional challenges into continental opportunities.
👉 Stay ahead of Africa’s digital finance revolution—explore what’s next.
With stronger enforcement mechanisms, enhanced investor safeguards, and alignment with global standards, Nigeria is no longer resisting change—it’s leading it.
Core Keywords: cryptocurrencies as securities, Nigeria crypto regulation, ISA 2024, SEC Nigeria, digital assets regulation, Virtual Asset Service Providers, crypto legal framework, Nigerian capital market