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Cryptocurrency has become popular all over the world and has become an integral part of the world’s financial system. Countries like Nigeria have embraced the use of crypto as a digital asset as a store of wealth. In fact, the number of cryptocurrency users in Nigeria is expected to rise to 28.69 million users by 2026.
However, while cryptocurrency offers new opportunities and significant potentials, it also comes with its own inherent risks like market manipulation and scams.
This has given birth to the need for clear regulations in order to manage risks and protect the investors. Despite facing several challenges in the creation of strong regulatory frameworks for cryptocurrency, the Security and Exchange Commission (SEC) has laid down several rules that govern the use and trade of cryptocurrencies in the country.
This article provides everything you need to know about Nigeria’s Security and Exchange Commission rules governing cryptocurrency.
Unified Legal Framework
Nigeria has taken steps to transition cryptocurrencies from a legal grey area to a formally recognised and regulated sector as crypto continues to gain global acceptance. Although owning crypto wasn’t illegal, the status of cryptocurrencies in Nigeria was previously ambiguous because the Central Bank of Nigeria (CBN) prohibited financial institutions from facilitating crypto transactions. This led to a restrictive environment for both crypto owners.
However, the passage of the Investment and Securities Act 2025 changed this and digital assets are now defined as securities under the authority of the Securities and Exchange Commission (SEC). This new legal framework outlines clear compliance requirements and regulatory rules. Thus, establishing the legality of cryptocurrencies in the country even if it remains controlled.
The Security and Exchange Commission was established by the Investment and Securities Act 2007 (ISA). It has the authority to regulate investments and security business in Nigeria, register and regulate investments and securities business, securities exchanges and any other recognised investment exchange.
At the moment, the regulations guiding cryptocurrencies are managed by the SEC and the CBN. Crypto firms are defined as Virtual Asset Service Providers (VASPs) and are required by the SEC to be licensed and operate by SEC Digital Asset Rules.
The commission is also in charge of licensing and supervising Virtual Asset Service Providers (VASPs), setting operational rules, and working to protect investors.
Licensing and Registrations
The SEC Rules on Issuance, Offering Platforms and Custody of Digital Assets 2022 set the framework for licensing and registration of businesses dealing with digital and virtual assets in Nigeria. The main categories of registration under the Rules include:
1. Digital Asset Offering Platforms (DAOPs)
This license permits a company to run an electronic platform for issuing digital assets in Nigeria. To qualify, the applicant must be registered with the Corporate Affairs Commission (CAC). In most cases, a DAOP works alongside a Digital Asset Custodian (DAC), which is responsible for holding the assets offered on the platform.
2. Digital Asset Custodians (DACs)
This license allows a company to handle the safekeeping and storage of digital or virtual tokens on behalf of clients. Only corporate bodies registered with the CAC are eligible to apply
3. Virtual Assets Service Providers (VASPs)
VASPs are licensed companies that can facilitate the exchange of virtual assets for fiat currency, swap between different types of digital assets, transfer assets, provide safekeeping services, manage assets, and offer financial services linked to the sale or issuance of digital assets on behalf of others.
4. Digital Asset Exchanges (DAXs)
This license covers the operation of an electronic marketplace where virtual or digital assets can be traded. To obtain it, the applicant must also be a company registered with the CAC.
ISA 2025: Cryptocurrencies Recognized as Securities
The Investment and Securities Act (ISA) 2025 was enacted on March 31, 2025 by President Bola Ahmed Tinubu to replace the previous ISA, updating the law with provisions impacting emerging trends, global standards and recent developments in the Nigerian Capital Market.
In particular, the introduction of these provisions and changes in the ISA holds significant impact on the ownership and use of digital and virtual assets such as cryptocurrencies.
Notably, among other changes introduced by the ISA 2025 is the expansion of the scope of what the law defines as “securities”.
Previously, securities under the ISA were classified as assets which could be acquired, transferred, or traded solely in relation to bonds, stock, debentures, shares, and other traditional instruments.
However, section 357 of the ISA 2025 expands the definition of Securities to include virtual and digital assets. Therefore, virtual and digital assets such as cryptocurrencies, Non-Fungible Tokens (NFTs), digital currencies and other digital representation of value can now be lawfully owned, transferred, digitally traded and used for payment or investment purposes in Nigeria.
Similarly, the ISA now recognizes Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges as capital market operators as being within the regulatory purview and oversight of the Securities and Exchange Commission.
Marketing Rules under Nigeria’s SEC Digital Assets Regulations
1. Prior Approval for Advertisements and Promotions
All adverts, promotions, or marketing campaigns for digital asset offerings—whether online, offline, or on social media—must first be cleared by the SEC. Virtual Asset Service Providers (VASPs) working with third-party promoters also need to get a “no-objection approval” from the SEC, whether or not the promoters are paid.
2. Restriction on Use of Influencers & Endorsements
The rules forbid the use of celebrities, fictional figures, or financial influencers (often called “Finfluencers”) in advertising digital assets.
3. Influencer Obligations and Disclosures
Anyone who wants to promote digital asset services must first obtain a “no-objection approval” from the SEC. They must ensure that the platform or VASP they are endorsing is licensed, and clearly state any rewards they receive for the promotion-whether money, tokens, NFTs, or whitelist access.
4. Penalties for Non-Compliance
Breaking these rules-such as promoting without approval, endorsing unlicensed services, or hiding payments-may lead to a minimum fine of ₦10 million or as much as three years in prison.
5. Clear and Transparent Messaging Required
Promotions must use plain, easy-to-understand language and avoid technical or confusing terms. Flashy or exaggerated phrases like “secure your future,” “best offer,” or “double your earnings” are discouraged to prevent misleading investors.
6. Active Monitoring and Enforcement
The SEC has stated it will closely track digital asset promotions across all platforms. Offenders will face sanctions, fines, and possible public exposure.
Anti-Money Laundering (AML)/Counter-Terrorism Financing (CTF) and Know Your Customer (KYC) Requirements
Digital asset service providers in Nigeria must follow strict rules to prevent money laundering and terrorism financing. These rules are primarily guided by the Money Laundering (Prohibition) Act, 2011 (as amended) and related regulations.
AML and CTF requirements are as follows:
- Businesses must verify the identity of all customers before opening accounts or conducting transactions. This includes collecting official identification documents, proof of address, and other relevant information.
- Institutions must monitor transactions for unusual or suspicious activity. Any transaction that appears to be linked to money laundering or terrorist financing must be reported to the Nigerian Financial Intelligence Unit (NFIU).
- Customer information, transaction records, and due diligence documentation must be kept for a minimum period (usually five years) to allow for audits and regulatory inspection.
- Organizations are required to assess the risk of money laundering and terrorism financing in their operations, including evaluating customers, products, services, and delivery channels.
- Any suspicious or unusual activity must be reported promptly to the NFIU. Failure to report can attract fines and regulatory penalties.
The following ars the Know Your Customer (KYC) requirements:
- Verifying the customer’s identity with government-issued IDs or corporate registration documents.
- Understanding the customer’s source of funds and the nature of their business or activity.
- Ongoing monitoring of customer transactions to detect any unusual behavior.
Crypto Taxation in Nigeria
Transactions involving digital assets are subject to taxation under existing laws in Nigeria. The Federal Inland Revenue Service (FIRS) treats crypto activities as taxable events, especially where there is profit or income generation.
Profits made from the sale or exchange of cryptocurrency may also be subject to capital gains tax, depending on the nature of the transaction and holding period.
The provisions of section 2 of the Finance Act 2023, section 3 of the CGTA was amended by including ‘digital assets’ as a chargeable asset for the purpose of capital gains tax in Nigeria.
The implication of this is that where the holder of a digital asset sells that digital asset, any profit that accrues from the sale of that asset will be subject to capital gains tax at the rate of 10%. Based on the above, capital gains from the disposal of digital assets are taxable at the rate of 10% in Nigeria.
Frequently Asked Questions on Nigeria’s SEC Rules Governing Cryptocurrency
Are crypto exchanges allowed to operate in Nigeria?
Crypto exchanges can operate legally in Nigeria, but they must register with the SEC and comply with AML/CFT regulations.
Are crypto transactions taxed in Nigeria?
Yes, profits from cryptocurrency activities are subject to capital gains tax under the country’s current tax regulations.
Which authorities regulate crypto in Nigeria?
Crypto-related activities in Nigeria are overseen by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
Conclusion
The Security and Exchange Commission rules set clear standards for anyone dealing with digital assets. They ensure that platforms, custodians, and service providers operate legally, protect investors, and follow anti-money laundering rules. It is important for anyone participating in the country’s growing crypto space to stay informed and compliant of these rules to avoid breaking the law.
Last updated on September 30, 2025
