In a pivotal move for Africa’s largest economy, President Bola Ahmed Tinubu has signed the Investments and Securities Act (ISA) 2024 into law, officially classifying cryptocurrencies as securities and bringing them under the regulatory jurisdiction of the Nigerian Securities and Exchange Commission (SEC).
According to reports from local media outlets, the new law significantly expands the SEC’s authority over Nigeria’s capital markets and modernizes the country’s financial regulatory framework to include digital assets and crypto exchanges. The law replaces the ISA 2007, marking a major overhaul aimed at aligning Nigeria with international regulatory standards such as the EU’s Markets in Crypto-Assets (MiCA) framework.
Crypto Regulation and Crackdown on Ponzi Schemes
The ISA 2024 grants the SEC powers to license and regulate cryptocurrency platforms, enforce compliance rules, and monitor trading activity. One of the central features of the legislation is its strict penalties for financial fraud, particularly targeting Ponzi schemes, which have become increasingly prevalent in Nigeria’s loosely regulated crypto market.
Under the new law:
- Individuals convicted of operating Ponzi or pyramid schemes may face a minimum of 10 years in prison.
- Fines start at ₦10 million (~$6,500) and may escalate to ₦40 million (~$26,000) depending on the severity of the offense.
The harsh penalties aim to protect investors and curb fraudulent activities that have often taken advantage of crypto’s growing popularity in the country.
Crypto’s Rise Amid Economic Turbulence
Despite repeated efforts by Nigerian authorities to clamp down on crypto usage, cryptocurrencies have flourished as an alternative financial system. Nigeria’s tech-savvy youth, battered by surging inflation and a plunging naira, have increasingly turned to crypto to preserve wealth and conduct cross-border transactions.
Between July 2023 and June 2024, Nigeria received an estimated $59 billion in cryptocurrency value, according to Chainalysis, making it one of the largest crypto markets in Africa by volume.
A Broader Fiscal Reform Agenda
Since taking office in 2023, President Tinubu has launched a sweeping economic reform plan aimed at boosting public revenues and narrowing Nigeria’s fiscal deficit. The new investments law is seen as part of this strategy, promoting regulatory clarity for crypto markets and building investor confidence.
The move follows a wider trend among global regulators to bring digital assets into legal frameworks. By classifying crypto as securities, Nigeria now joins jurisdictions like the European Union and Hong Kong in formalizing crypto market oversight.
A Turning Point for Nigeria’s Crypto Sector
With the new law now enacted, the next steps will likely involve the SEC issuing operational guidelines for crypto exchanges, wallet providers, and other digital asset service entities. While some fear this could stifle innovation, others argue that a clear legal framework will attract institutional investors and spur responsible growth in Nigeria’s rapidly evolving crypto space.
