Nigerian authorities are moving carefully to regulate the country’s booming cryptocurrency market, Africa’s largest, as they seek to provide legal clarity while combating fraud and financial volatility.
Despite the widespread adoption of cryptocurrencies, regulators have historically been skeptical of digital assets. But with Nigeria set to rank second globally in crypto adoption in 2023 and 2024, authorities are increasingly shifting toward a more structured approach.
The Securities and Exchange Commission (SEC) took a step toward formalizing the sector by granting preliminary approval to two cryptocurrency exchanges — Busha Digital Limited and Quidax Technologies Limited — in August 2024. SEC director-general Emomotimi Agama emphasized that efforts are underway to clarify the legal status of digital assets in the country.
Industry leaders see the move as a positive development. “The SEC approval demonstrates a commitment to consumer protection and market stability,” said Quidax CEO Buchi Okoro. However, skepticism remains given the prevalence of scams and fraudulent schemes.
The Nigerian Economic and Financial Crimes Commission (EFCC) reported in December that 792 people, including foreign nationals, were arrested for alleged cryptocurrency-related fraud. The SEC also continues to warn against unregistered crypto platforms, highlighting the risks for investors.
Beyond licensing exchanges, the Nigerian parliament is considering a bill that could create a regulatory framework for digital currencies. President Bola Tinubu, who has previously promised policies to support digital asset adoption, has faced challenges balancing innovation with economic stability. In early 2024, Nigeria imposed new restrictions on crypto transactions to stem the devaluation of the naira, leading to the closure of Binance’s naira operations and legal action against the exchange.
Despite regulatory hurdles, industry stakeholders remain optimistic. “The government’s stance on innovation is evolving and we are seeing a shift in approach,” said Laolu Biyi Samuel, co-founder of Busha Digital Limited.
Experts believe that Nigeria’s strong interest in digital assets can yield economic gains if managed properly. However, concerns remain over the risks of money laundering, terrorist financing and investment losses due to crypto volatility.
“It is not too late for Nigeria to develop a national Bitcoin strategy,” said Obinna Iwuno, president of the Blockchain Stakeholders Association of Nigeria (SiBAN). “Regulatory clarity is now essential to reap the benefits of digital assets while protecting investors.”