When you ask, "Is crypto regulated in Nigeria?" the short answer is yes - but it’s a nuanced picture that has changed dramatically in the last two years. In March 2025 the government passed the Investments and Securities Act 2025 (ISA 2025), officially classifying digital assets as securities and handing oversight to the Securities and Exchange Commission (SEC). At the same time, the Central Bank of Nigeria (CBN) lifted its 2021 ban and issued VASP Guidelines that let banks work with licensed crypto firms. Below you’ll find the practical details you need - whether you’re a trader, a startup, or just curious about the legal climate.

Quick Take

• Crypto is now a recognized security under Nigerian law.
• The SEC issues licenses for exchanges and token issuers; the CBN governs payment‑related services.
• Licensing requires paid‑up capital, a fidelity bond, a local office and Nigerian management.
• Non‑compliant VASPs face fines starting at ₦10million and possible license suspension.
• Tax rules under the Nigeria Tax Administration Act 2025 will take effect in 2026.

How the Legal Landscape Shifted

Before 2025 Nigeria’s approach was contradictory: the CBN banned banks from handling crypto transactions in 2021, yet enforcement was lax, leaving a gray market of peer‑to‑peer trades. The ban hurt users - many had their accounts frozen in 2021 - but it also fueled a massive underground ecosystem. By late 2023 the government realized the economic upside: roughly $92billion worth of crypto moved through Nigerian wallets between July2024 and June2025, making the country one of the world’s largest crypto hubs.

The turning point came with the signing of ISA 2025. The act treats digital tokens as securities, which means the same rules that apply to stocks now apply to crypto assets. The SEC became the primary regulator, working hand‑in‑hand with the CBN, the Economic and Financial Crimes Commission (EFCC), and the Nigerian Financial Intelligence Unit (NFIU) to form a multi‑agency oversight network.

Key Laws and Guidelines

• Investments and Securities Act 2025 (ISA 2025): defines digital assets as securities, sets disclosure standards, and empowers the SEC to grant or revoke licenses.
• CBN VASP Guidelines (Dec2023): allows banks to open accounts for licensed VASPs, outlines AML/KYC expectations for payment services.
• National Anti‑Money Laundering Act (Amended 2025): extends AML obligations to virtual assets, giving regulators access to telecom data for fraud investigations.
• Nigeria Tax Administration Act 2025 (NTAA): introduces a 10% capital gains tax on crypto profits, effective 2026, with penalties for under‑reporting.

Licensing Requirements for Crypto Businesses

Anyone wanting to run an exchange, a token sale platform, or a crypto‑focused fintech must apply for a license from the SEC. The process is split into two main categories:

1. Provisional License - Allows a pilot operation for up to 12months while the regulator reviews full compliance.
2. Full License - Granted after the provisional period, provided all technical and financial criteria are met.

Both categories share core obligations:

• Paid‑up capital of at least ₦500million (≈$3,300) for exchanges; ₦250million for token issuers.
• Fidelity bond covering 150% of the paid‑up capital.
• Registered Nigerian corporate entity with a physical office and at least two Nigerian directors.
• Robust AML/KYC program audited by an SEC‑approved third party.
• Monthly reporting to the SEC and quarterly reports to the NFIU.

The first provisional licenses were awarded in late2024 to Busha and Quidax. Dozens of applications are now in the pipeline, but the vetting process can take six months or longer.

What It Means for Crypto Users

For everyday traders, the new rules bring both clarity and new responsibilities. Here’s the practical impact:

• Legal Safety: Trading on a SEC‑licensed exchange shields you from the risk of account freezes that plagued users in 2021.
• KYC Checks: You’ll need to verify your identity with a government ID, proof of address, and possibly a source‑of‑funds statement.
• Tax Reporting: Starting 2026 you must declare crypto gains on your annual tax return. A 10% capital‑gains tax applies, with penalties for late filing.
• Peer‑to‑Peer (P2P) Trading: P2P remains legal, but platforms facilitating large‑scale P2P without a license could be targeted for enforcement.

Most Nigerians continue to favor P2P because it’s fast and cheap, but the trend is shifting toward licensed exchanges as they improve user experience and offer fiat on‑ramps.

Compliance Challenges for Businesses

The regulatory environment is thorough, which is great for consumer protection but can be a headache for startups:

• Overlapping Jurisdictions: The SEC governs securities‑type activities, while the CBN controls payment‑related services. Companies that do both need to file with two regulators.
• Documentation Load: Monthly transaction reports, AML logs, and quarterly risk assessments consume significant resources.
• Local Talent Requirement: You must appoint at least one Nigerian senior manager who can be reached by the SEC for compliance queries.
• License Delays: The SEC’s thorough vetting means even well‑prepared firms can wait six‑plus months before a provisional license is issued.

Most firms outsource compliance to local law firms that specialize in the ISA 2025 framework. That adds cost but reduces the risk of costly penalties - which start at ₦10million for the first month of non‑compliance and increase by ₦1million each additional month.

Future Outlook and Regional Context

Compared with Kenya and South Africa, Nigeria was the first in Africa to create a full licensing regime for crypto. The multi‑agency model offers robust consumer protection, yet it also adds complexity. Analysts expect the following trends:

1. More Licenses: As the SEC refines its Digital Assets Rules, we’ll see a steady stream of new license approvals, especially for niche services like crypto‑backed loans.
2. Tax Integration: Once the NTAA kicks in, tax software providers will add crypto modules, making compliance smoother for users.
3. Regional Collaboration: Nigeria is part of a pan‑African fintech coalition that aims to harmonize crypto regulations, reducing cross‑border friction.
4. Innovation Hubs: Cities such as Lagos and Abuja will attract crypto‑focused incubators, leveraging the clear legal framework to pull foreign investment.

In short, the regulatory certainty is turning Nigeria into a fintech hotspot while still protecting its massive, un‑banked population.

Getting Started - A Checklist for Entrepreneurs

1. Incorporate a Nigerian private limited company and set up a physical office.
2. Appoint at least two Nigerian directors, one of whom will serve as the compliance officer.
3. Secure the required paid‑up capital and obtain a fidelity bond from an approved insurer.
4. Develop an AML/KYC program that meets SEC and NFIU standards; have it audited by a certified third party.
5. Submit the provisional license application through the SEC’s online portal, attaching corporate documents, capital proof, and bond certificates.
6. While waiting, engage a local legal counsel experienced in ISA2025 to review contracts and token sale structures.
7. Plan for ongoing reporting: monthly transaction summaries to the SEC and quarterly AML reports to the NFIU.

Following these steps minimizes the chance of hitting a regulatory roadblock later on.