Nigeria has taken a significant step towards regulating cryptocurrencies with the signing of the Nigerian Investments and Securities Act (ISA) 2025 into law.
The Nigerian Investments and Securities Act (ISA) 2025, recently signed into law by President Bola Ahmed Tinubu, has effectively ended the uncertainty surrounding the status of cryptocurrencies. According to Ophi Rume, a local crypto advocate and educator, the amended securities law "officially" recognizes cryptocurrencies as an asset class.
This recognition not only ends the uncertainty surrounding cryptocurrencies but also means they are no longer banned assets. Furthermore, Rume stated that law enforcement agencies that were "harassing" people involved with these assets will have to cease such actions.
Rume's comments followed the recent announcement by Nigeria's Securities and Exchange Commission (SEC) that the new law supersedes the Investments and Securities Act No. 29 of 2007. Director-General Emomotimi Agama explained that the new law empowers SEC Nigeria to foster innovation and better protect investors. He added that it has repositioned Nigeria as a competitive destination for both local and foreign investments.
In addition to recognizing digital assets and investment contracts as securities, the ISA 2025 also places virtual asset service providers (VASPs) under SEC Nigeria's regulatory oversight. The law further bans Ponzi schemes and imposes severe penalties, including jail terms, for the promoters of such schemes.
While the proposed penalties for Ponzi schemes have been welcomed by members of Nigeria's crypto industry, Rume cautioned that this section would need amendments to ensure that financial penalties remain proportionate.
"This is because a fine of 20 million naira [$13,000] may seem insignificant for a platform that has scammed a lot of people out of large sums of money in dollars, say $500,000. The fine could easily be dismissed," the educator remarked.
Overall, Rume stated that SEC Nigeria should encourage innovation in the crypto market and offer tax holidays to foreign crypto firms looking to enter the country.