Nigerian authorities are moving to establish regulatory control over Africa’s most extensive cryptocurrency market, aiming to introduce legal certainty in a sector long plagued by fraud and volatility.
For years, digital assets have been met with skepticism from regulators and government officials, despite their growing popularity among Nigerians. In both 2023 and 2024, Nigeria ranked second globally in cryptocurrency adoption, following India, according to a report by crypto research firm Chainalysis.
Over the past year, regulatory efforts have slowly begun to materialize, even as concerns over fraud persist. The Securities and Exchange Commission (SEC) of Nigeria has been at the forefront of these initiatives, working to create a structured framework for digital asset transactions. In August, SEC Director-General Emomotimi Agama confirmed to AFP that the agency was pushing forward with its efforts to provide clarity on cryptocurrency regulations.
That same month, the SEC granted “Approval-in-Principle” to two crypto exchanges—Busha Digital Limited and Quidax Technologies Limited—marking a significant milestone in the country’s regulatory journey. Since receiving their licenses, both companies have commenced operations.
“We believe this regulatory move is a positive start that will benefit the market in the long run by building trust and stability,” said Buchi Okoro, co-founder and chief executive of Quidax, in an interview with AFP. “The SEC approval sent a clear signal to potential crypto investors, emphasizing their focus on customer protection.”
However, efforts to regulate the market have been hindered by ongoing skepticism and persistent fraudulent activities. The Economic and Financial Crimes Commission (EFCC) reported in December that it had arrested 792 individuals—among them numerous foreign nationals—in a large-scale operation in Lagos’ affluent Victoria Island. These arrests were linked to alleged cryptocurrency investment fraud and romance scams, where fraudsters deceive victims into believing they are in romantic relationships to extract money.
In November, the SEC also issued an advisory against Marino FX Limited, a company falsely claiming to be a registered cryptocurrency exchange. It was one of several warnings the SEC has released over time as it continues to monitor suspicious entities operating within the sector.
Beyond licensing exchanges, Nigeria’s parliament is currently considering an Investment and Securities Bill that, if passed into law, would establish a formal regulatory framework for digital currencies. President Bola Tinubu, who assumed office in 2023, had previously pledged to create a regulatory environment that would support the healthy adoption of digital assets—a stark contrast to his predecessor’s rigid stance against cryptocurrencies.
Despite these early promises, Nigeria’s government later imposed new restrictions on crypto exchanges in a bid to stabilize the local naira currency. By February 2024, Central Bank Governor Olayemi Cardoso directly accused Binance, the world’s largest cryptocurrency exchange, of contributing to the currency’s decline. The allegations forced Binance to suspend all naira-related transactions, prompting many users to offload their digital assets amid fears of being locked out of their funds.
Authorities later arrested two Binance executives who had traveled to Nigeria for negotiations, although one was released while the other managed to flee from custody. Meanwhile, the country’s Inland Revenue Service has an ongoing lawsuit against Binance, demanding $81.5 billion in unpaid taxes. The exchange had not been officially registered to operate in Nigeria.
As Nigeria moves forward with its regulatory framework, the government faces a delicate balancing act—seeking to legitimize digital asset transactions while cracking down on fraudulent schemes that have long plagued the industry. The road ahead remains uncertain, but the steps taken so far indicate a decisive shift towards bringing greater accountability to Africa’s most vibrant crypto market.
