In a major policy shift, Nigeria has officially recognized cryptocurrencies as securities, marking a significant milestone in the country’s evolving relationship with digital assets. This move, announced by the Nigerian Securities and Exchange Commission (SEC), signals a more structured approach to regulating crypto assets and presents both opportunities and challenges for industry stakeholders.
President Bola Tinubu’s recent enactment of the Investment and Securities Act (ISA) 2025 marks a new era of regulatory clarity for the country’s digital asset ecosystem, which has been shrouded in uncertainty for more than a decade.
The new law not only acknowledges virtual assets and investment contracts as securities but also places Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the regulatory oversight of the Securities and Exchange Commission (SEC).
Background: A History of Uncertainty
For years, Nigeria has walked a tightrope when it comes to cryptocurrencies. While the Central Bank of Nigeria (CBN) banned financial institutions from servicing crypto-related accounts in 2021, the country simultaneously became one of the fastest adopters of crypto globally. Peer-to-peer trading flourished, and blockchain startups mushroomed across fintech and Web3 sectors, often navigating a regulatory grey zone.
The SEC first indicated interest in regulating digital assets as securities in 2022 when it released a set of guidelines for digital asset offerings. However, practical enforcement was limited, and ambiguity persisted around what assets fell under SEC jurisdiction. That has now changed with the formal classification.
What the Recognition Means
Under the new regulatory framework, cryptocurrencies and digital tokens—particularly those used for investment purposes—will be classified as securities. This gives the SEC clear oversight authority and requires platforms, issuers, and custodians dealing in such assets to register and comply with set standards.
Key implications include:
- Licensing Requirements: Exchanges and custodians must register with the SEC and obtain the necessary licenses.
- Consumer Protections: Investors will benefit from more transparency, disclosures, and regulatory safeguards.
- Legal Clarity: Projects can now launch with a clearer understanding of their legal responsibilities and the expectations of regulators.
- Collaboration with CBN: The recognition opens the door for possible collaboration between the SEC and the Central Bank to integrate digital asset services into the broader financial ecosystem.
Reactions from the Crypto Community
Reactions within Nigeria’s vibrant crypto community have been mixed but largely optimistic.
Some see the move as long overdue. “This is a big step toward legitimacy,” said Emmanuel Onuoha, a web3 builder. “It signals that Nigeria is ready to support innovation, but with rules that protect users and ensure transparency.”
Others express caution, especially over the scope of regulation and whether it might stifle startups or favor larger players. “We need to make sure the regulatory burden isn’t so heavy that local innovation is discouraged,” said a founder of a Lagos-based Web3 startup.
Implications for Web3 Builders and Investors
This recognition has profound implications for Nigeria’s growing Web3 and crypto startup ecosystem. Builders can now design tokenized products and platforms with more certainty, and investors—local and international—may feel more secure entering a regulated environment.
For Nigerian-founded exchanges or swap platforms, this development could pave the way for broader financial partnerships, improved regulatory clarity, and expanded product offerings—such as interest-bearing wallets or cross-border remittance tools—provided they align with the new compliance standards.
The move also sets a precedent for other African countries watching Nigeria as a bellwether for digital asset policy on the continent.
What Comes Next?
The SEC has indicated that further guidance will be released in the coming months, outlining licensing processes, compliance checklists, and engagement channels for stakeholders. A regulatory sandbox may also be expanded to allow startups to test innovative products under supervision.
As Nigeria continues to refine its digital economy strategy, this step positions the nation to play a leading role in shaping Africa’s crypto future—one where innovation and regulation can hopefully coexist.
