Nigerian authorities are moving cautiously to establish a regulatory framework for the country’s cryptocurrency sector, aiming to bring legal clarity to an industry long plagued by fraud and volatility. Despite official scepticism, Nigeria has emerged as a major player in global crypto adoption, ranking second after India in 2023 and 2024, according to Chainalysis, a global crypto research firm.
Over the past year, efforts to regulate the sector have gained momentum, even as law enforcement agencies continue to grapple with widespread fraud. In August, the director-general of Nigeria’s Securities and Exchange Commission (SEC), Emomotimi Agama, confirmed that the regulator was advancing plans to clarify the legal standing of digital assets.
That same month, the SEC granted “Approval-in-Principle” to two cryptocurrency exchanges—Busha Digital Limited and Quidax Technologies Limited—marking the first step toward a structured market. Both companies have since launched operations under regulatory oversight.
“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. “The SEC approval sent a clear signal to potential crypto investors, emphasising their focus on customer protection.”
Despite these regulatory advancements, challenges persist. Fraudulent schemes and investment scams remain a serious concern. In December, Nigeria’s Economic and Financial Crimes Commission (EFCC) announced the arrest of 792 individuals, including numerous foreign nationals, for their alleged involvement in cryptocurrency investment fraud and romance scams. The arrests took place in Lagos’ affluent Victoria Island district.
Romance scams, where fraudsters feign romantic interest to deceive victims into sending money, have become increasingly prevalent. In November, the SEC issued an advisory against Marino FX Limited, warning that the company falsely claimed to be a registered cryptocurrency exchange. It was one of several warnings issued by the commission in recent years.
President Bola Tinubu’s administration initially signalled a shift away from his predecessor’s hardline stance on digital assets, promising a regulatory framework that would encourage the responsible adoption of cryptocurrency. However, months after taking office, the government imposed new restrictions on crypto exchanges in a bid to stabilise the country’s weakening naira.
In February 2024, Central Bank Governor Olayemi Cardoso singled out Binance, the world’s largest digital asset exchange, blaming it for exacerbating currency instability. The platform subsequently ceased all naira transactions, prompting many users to sell off their holdings in fear of losing access to their funds.
Industry experts stress the need for regulatory clarity to support the sector’s growth while protecting investors. “Regulatory clarity and policies should be prioritised now,” said Obinna Iwuno, president of the Stakeholders in Blockchain Association of Nigeria (SiBAN). “It is not too late to start discussing a national Bitcoin strategy and action plans.”
As Nigeria navigates its path toward crypto regulation, stakeholders remain hopeful that a well-defined legal framework will strike a balance between fostering innovation and mitigating risks in Africa’s largest cryptocurrency market.
