Despite legal reforms, Nigerian banks continue to freeze accounts linked to cryptocurrency activity. Arrests persist. Confusion reigns. For a country trying to become Africa’s tech capital, Nigeria’s crypto regulation is sending mixed messages.
When Nigeria passed the Investment and Securities Act (ISA), 2024, it appeared to mark a new chapter for the country’s crypto ecosystem. The law formally granted the Securities and Exchange Commission (SEC) authority over digital assets, which many interpreted as a clear signal: crypto is now legal.
REGULATION | Nigerian President Signs Investment and Securities Act 2024 into Law Formally Classifying Virtual Assets as Securities
For the first time, virtual assets and investment contracts are formally classified as securities, placing Virtual Asset Service Providers… pic.twitter.com/g2JEJ9dmB9
— BitKE (@BitcoinKE) March 29, 2025
But on the ground, the situation remains murky. Crypto users still face frozen accounts, red flags from banks, and – in some cases – the threat of arrest. If the law has changed, why hasn’t the experience of using crypto in Nigeria?
The confusion stems from a long-standing tug-of-war between regulators. In 2021, the Central Bank of Nigeria (CBN) issued a directive barring financial institutions from facilitating crypto transactions – essentially cutting crypto off from the banking system.
The Central Bank of Nigeria Warns Financial Institutions Against Facilitating Crypto Payments with Crypto Exchanges: https://t.co/ugAgRYWuZy via @BitcoinKE
— davgit (@DavGit) February 5, 2021
While the CBN lifted that restriction in late 2023, it did so quietly, with little public guidance, leaving banks unsure of how to proceed.
REGULATION | The Central Bank of #Nigeria Lifts the 2021 Banking Restrictions on Cryptocurrency Exchanges and VASPs
In a circular sent to the banks and financial institutions in Nigeria, the Central Bank (CBN) guided that the new regulation supersedes previous instructions on… pic.twitter.com/Eeheb2yjgu
— vid.ken (@vid_kenNFT) December 24, 2023
In practice, not much has changed.
“We still restrict crypto-linked accounts,” said an operations staff member at a leading Nigerian fintech. “It’s just not worth the risk.”
Another widely-used fintech product even displays a notice:
“In accordance with CBN regulations, accounts dealing with cryptocurrency transactions will be restricted.”
These warnings have had a chilling effect.
Individuals have reported having their bank accounts frozen simply for receiving funds that passed through a crypto intermediary. Others say they’ve been detained or interrogated by authorities – not for breaking any laws, but for being caught in a gray zone where policy says one thing and practice says another.
REGULATION | Nigeria Freezes Crypto Accounts with Over $37 Million in $USDT Belonging to Suspected Protest Organizers
The wallet with the lion’s share of the assets has over $37 million in $USDT while another has over $400,000 in $USDT.https://t.co/RyifU23UB0 @Tether_to… pic.twitter.com/9U8pax0MP8
— BitKE (@BitcoinKE) August 14, 2024
A senior CBN staff member, who requested anonymity, described the situation as “dicey.”
“Implementation is different from signing something into law.”
REALITY CHECK | Nigerian Banks and Fintechs Remain Wary of Crypto Despite New Licenses
Despite the SEC’s issuance of provisional licenses to Quidax and Busha, senior executives at major fintech startups report that banks are ignoring these licenses.
Until clarity is achieved,… pic.twitter.com/ae0NoSUoB9
— BitKE (@BitcoinKE) September 10, 2024
BitKE Insights: What the New Law Actually Changes
According to reporting by BitKE, one of Africa’s leading crypto media platforms, the ISA 2025 does establish a legal framework for digital asset services – but with conditions.
Crypto exchanges and wallet providers must register and obtain licenses from the SEC.
The Act allows the SEC to classify cryptocurrencies as securities, giving it enforcement powers and investor protection mandates.
However, the CBN remains the primary authority over monetary policy and banking operations, meaning banks can still determine how – or if – they engage with crypto-related transactions.
This regulatory overlap has created a gap between de jure (what the law allows) and de facto (what happens in practice). BitKE notes that while some companies are actively seeking licensing, the dual oversight is creating uncertainty.
Until the SEC and CBN clarify their roles – and ideally issue a joint framework – many institutions will continue to act defensively.
South Africa Offers a Contrast
While Nigeria hesitated, South Africa moved decisively. In 2022, the Financial Sector Conduct Authority (FSCA) designated crypto assets as financial products. By 2024, over 248 companies were licensed to operate within the country’s regulatory framework.
REGULATION | South Africa Has Now Approved 248 Crypto Providers Out of 420 Received So Far, Only 9 Applications Rejected
This post identifies two key areas that resulted from applications getting rejected by the FSCA.https://t.co/9osgvhErjt @fscasouthafrica pic.twitter.com/2fvVgBZoty
— BitKE (@BitcoinKE) December 16, 2024
African firms – and even international players – are choosing South Africa over Nigeria because the rules are clearer. South Africa may not have all the answers, but it has created a baseline of predictability – something Nigeria is still struggling to provide.
What Needs to Happen
Regulatory Alignment The CBN and SEC must align on crypto policy. Competing or contradictory guidance only fuels uncertainty. A joint circular or regulatory framework would go a long way in restoring confidence among users and businesses.
Clearer Communication Authorities must proactively educate the public and financial institutions about the new legal landscape. The current opacity is not just confusing – it’s dangerous. Advocacy groups and tech leaders must also step up, just as they have in Kenya, where regular dialogue with regulators has led to more nuanced, responsive policies.
Consistent Enforcement Finally, policy must match enforcement. Nigerians should not be penalized for operating in a space the government now claims to support. The threat of arrest or asset seizure must be eliminated if crypto is truly legal.
So, Is Crypto Legal in Nigeria?
Legally? Yes.
Practically? It depends on who you ask – or which bank you use.
Until the CBN and SEC speak with one voice, and enforcement reflects policy, Nigeria’s crypto sector will remain in limbo.
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