Quick Answer
Yes, crypto is legal in Nigeria but strictly regulated.
- A 2025 law recognizes crypto as securities under SEC regulation.
- Banks can serve crypto firms licensed by the Securities and Exchange Commission.
Legal Status of Crypto in Nigeria
Cryptocurrency in Nigeria has transitioned from a legal gray area to a formally recognized and regulated sector. Its status was previously ambiguous because while owning crypto was not illegal, the Central Bank of Nigeria (CBN) had prohibited financial institutions from facilitating transactions, creating a restrictive environment. The passage of the Investments and Securities Act 2025 changed this by defining digital assets as securities under the authority of the Securities and Exchange Commission (SEC). This new legal framework establishes clear compliance requirements and regulatory oversight, solidifying crypto's legal, albeit controlled, position in the country.
Current Regulations
Current regulations are managed by the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN). The SEC requires crypto firms, defined as Virtual Asset Service Providers (VASPs), to be licensed and adhere to its Digital Assets Rules. In a significant policy reversal, the CBN issued VASP Guidelines in December 2023, permitting banks to offer accounts and services to these licensed crypto businesses. This framework establishes a path for legal operation but is paired with strict oversight and recent enforcement actions against non-compliant platforms.
Regulatory Authorities
Several key regulatory bodies collaborate to oversee Nigeria's complex cryptocurrency landscape.
- Central Bank of Nigeria (CBN): The CBN is responsible for the nation's monetary policy and the stability of its financial system. It issues directives governing how banks interact with crypto entities, now permitting them to serve VASPs that are licensed by the SEC.
- Securities and Exchange Commission (SEC): Empowered by the 2025 Investment and Securities Act, the SEC is the primary regulator for digital assets, which are legally defined as securities. The commission licenses and supervises Virtual Asset Service Providers (VASPs), sets operational rules, and works to protect investors.
- Economic and Financial Crimes Commission (EFCC): The EFCC is a law enforcement agency that investigates financial crimes associated with cryptocurrency, such as money laundering and terrorism financing. It has the authority to take enforcement actions, including freezing accounts linked to illicit activities on crypto platforms.
- Nigeria Deposit Insurance Corporation (NDIC): The NDIC is responsible for insuring bank deposits and protecting depositors in the traditional banking system. In the crypto space, it primarily functions to warn the public that investments in digital currencies are not covered by its insurance and are not protected by law.
- Independent Corrupt Practices and Other Related Offences Commission (ICPC): The ICPC is another law enforcement body focused on combating corruption and related financial crimes. It highlights the risks of cryptocurrencies being used for illicit financial flows and addresses the legal challenges posed by their anonymity.
Historical Context
Nigeria's crypto regulations began with a 2017 Central Bank of Nigeria (CBN) circular warning financial institutions against virtual currencies. This escalated in February 2021 when the CBN banned banks from facilitating crypto transactions, a move that pushed the market underground and fueled a massive peer-to-peer (P2P) trading boom. A significant policy shift occurred in May 2022 when the Securities and Exchange Commission (SEC) introduced a regulatory framework for digital assets. The landscape changed again in December 2023 as the CBN reversed its ban, allowing banks to serve licensed crypto firms. This evolution culminated in the 2025 Investment and Securities Bill, which formally recognized crypto assets and solidified the SEC's regulatory authority.
Compliance Requirements for Businesses in Nigeria
Businesses operating in Nigeria's crypto space must navigate a set of compliance rules established by regulatory bodies like the SEC and CBN. Key requirements focus on preventing financial crimes and protecting consumers. These include:
- Anti-Money Laundering (AML) Checks: While the Investments and Securities Act 2025 does not list specific procedures, it places crypto firms under SEC oversight, which mandates these obligations. Firms must implement effective AML and Combating the Financing of Terrorism (CFT) controls. According to CBN guidance, this involves robust customer identification, verification, and ongoing monitoring of transfers to prevent illicit activities.
- Know Your Customer (KYC) Requirements: Firms must establish and follow effective customer due diligence policies. This includes identifying and verifying all customers to prevent anonymous transactions, a process reinforced by the SEC's intent to monitor transactions for tax purposes.
- Licensing and Operational Compliance: All crypto exchanges and Virtual Asset Service Providers (VASPs) must obtain a license from the Nigerian SEC to operate legally. They are required to comply with the SEC's regulatory framework, which may include participation in its regulatory sandbox. The 2025 Act also introduced stricter penalties for operating or promoting Ponzi schemes.
Why this matters for Cross-Border Payments
For businesses engaged in cross-border payments, Nigeria's regulatory framework introduces both legitimacy and complexity. While the ability to use licensed crypto platforms for international transactions offers a formal alternative to traditional banking, it also creates new operational hurdles. Companies must now navigate stringent AML/KYC requirements and ensure their local partners are fully licensed, which can slow down payment processing and increase compliance costs. This shift from a largely unregulated P2P environment to a supervised system adds a layer of friction, potentially impacting the speed and ease of doing business with Nigerian entities.
How Lightspark Enables Compliant Crypto-Native Payments
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For regulated institutions navigating Nigeria's rules, Lightspark provides tools that facilitate compliance. Features like audit-ready reporting, flexible custody options, and developer APIs with compliance integrations help businesses meet their own stringent AML and KYC obligations. This infrastructure allows companies to leverage crypto for payments while maintaining the security and oversight required by bodies like the SEC and CBN.
To learn how Lightspark can help your business navigate global payments, connect with our sales team.
Notice: This article is provided for informational purposes only and does not constitute legal advice.
FAQs
Can I still use P2P for crypto in Nigeria?
While peer-to-peer (P2P) trading is not explicitly banned, regulators are pushing for transactions to occur through licensed platforms for better oversight. Users engaging in P2P may face increased scrutiny from financial institutions monitoring for illicit activities.
Do I have to pay taxes on my crypto gains in Nigeria?
Nigeria is developing its crypto tax framework, and the SEC has indicated its intent to monitor transactions for tax purposes. Individuals and businesses should assume that crypto-related income is subject to existing capital gains or income tax laws and seek professional advice.
What happens if I use an unlicensed crypto exchange in Nigeria?
Using an unlicensed exchange carries significant risks, as your funds are not protected and you have no legal recourse in case of fraud or platform failure. Furthermore, you could inadvertently become involved in transactions that are flagged for money laundering by the EFCC.
Sources
- Adeyemo, Sam. "Nigeria’s President Signs Bill Recognizing Digital Assets into Law." Mariblock, 2 Apr. 2025, updated 8 May 2025, www.mariblock.com/nigerias-president-signs-bill-recognizing-digital-assets-into-law/.
- Central Bank of Nigeria. "CBN UPDATE, Vol. 3, No. 2." Central Bank of Nigeria, Feb. 2021, www.cbn.gov.ng/out/2021/ccd/volume%203%20number%202%20cbn%20update%20february%202021.pdf.
- Central Bank of Nigeria. "Virtual Currencies not Legal Tender in Nigeria." Central Bank of Nigeria, Press Release, 28 Feb. 2018, www.cbn.gov.ng/out/2018/ccd/press%20release%20on%20virtual%20currencies.pdf.
- Mbachu, Dulue. "Nigeria to Allow Cryptocurrencies in New Law While Targeting Risk." African Business, 18 Mar. 2025, african.business/2025/03/finance-services/nigeria-to-allow-cryptocurrencies-in-new-law-while-targeting-risk.
- "Nigeria Cryptocurrency - Blockchain and Crypto Regulations." Freeman Law, 2022, freemanlaw.com/cryptocurrency/nigeria/.
- Osazuwa, Tiwalola, et al. "Overview of Nigeria’s Dynamic Cryptocurrency Regulatory Landscape." International Bar Association, 18 June 2024, www.ibanet.org/overview-of-cryptocurrency-regulatory-landscape-nigeria.
- Singh, Shailey, and Guneet Kaur. "An Overview of Cryptocurrency Regulations in Nigeria." Cointelegraph, 24 Sept. 2023, updated 8 Aug. 2025, cointelegraph.com/learn/articles/crypto-regulations-in-nigeria.
