New Legislation Brings Cryptocurrencies Under SEC Umbrella
President of Nigeria Bola Ahmed Tinubu has signed the Investments and Securities Act 2024, legally classifying cryptocurrencies as securities. The move brings the fast-growing crypto sector under the regulatory umbrella of the Nigerian Securities and Exchange Commission (SEC), in place of the now outdated 2007 legislation.
The bill provides the SEC with more powers to oversee not just traditional securities markets but also digital assets, including exchanges and issuers of tokens in Nigeria.
Stricter Penalties for Ponzi Schemes
In response to the overall increase in financial frauds related to digital assets, the Act also provides for higher penalties for fraud investment schemes. Individuals convicted of operating Ponzi schemes can now be jailed for at least 10 years and fined at least ₦10 million ($6,500), with the maximum fines pegged at ₦40 million ($26,000) based on the severity.
Crypto Use Increases Against Economic Pressures
The bill comes as crypto adoption explodes in Nigeria. With the naira having collapsed against the dollar since mid-2023 and inflation eroding savings, increasingly, Nigerians—particularly young, tech-savvy ones—have turned to cryptocurrencies as a hedge.
Chainalysis data shows Nigeria received nearly $59 billion in crypto value from July 2023 through June 2024, making it one of Africa’s top crypto markets.
Following Global Regulatory Trends
President Tinubu’s government has prioritized fiscal reforms since 2023, focusing on shoring up government revenues and plugging budget loopholes. The new legislation aligns Nigeria with global moves—such as the EU’s Markets in Crypto-Assets (MiCA) regulation—toward formalizing crypto regulation.
The legislative reform is a landmark for Nigeria’s digital economy because it seeks to balance innovation, investor protection, and market integrity.
