Nigeria’s regulatory approach to digital assets has evolved significantly. After several years of restrictions, the Central Bank of Nigeria (CBN) lifted its prohibition on banks facilitating cryptocurrency transactions in December 2023 and issued new guidelines for Virtual Assets Service Providers (VASPs). The Securities and Exchange Commission (SEC) has also issued comprehensive rules for digital assets under the Investments and Securities Act 2025.
The Prohibition Period (2017 to 2023)
The CBN issued its first circular cautioning against cryptocurrencies in 2017. In February 2021, the CBN directed all banks and financial institutions to close accounts of any persons or entities transacting in cryptocurrencies. Despite the prohibition, Nigeria consistently ranked among the highest in the world for cryptocurrency adoption by volume.
The Reversal: December 2023
In December 2023, the CBN published new guidelines for banks and other financial institutions dealing in virtual assets. The guidelines permitted banks to open accounts for licensed Virtual Assets Service Providers, subject to compliance with stringent AML/CFT requirements.
CBN Guidelines for Virtual Assets Service Providers
The CBN guidelines define VASPs as any entity that conducts activities including: exchange between virtual assets and fiat currencies, exchange between one or more forms of virtual assets, transfer of virtual assets, and safekeeping or administration of virtual assets. VASPs must apply for a licence from the CBN and must comply with detailed AML/KYC requirements.
The SEC Framework Under the ISA 2025
The Investments and Securities Act 2025 significantly expanded the SEC regulatory jurisdiction over digital assets. The ISA 2025 expressly brought digital assets within the definition of securities and required digital asset exchanges and related businesses to register with the SEC. Under the ISA 2025, a company that offers digital assets to the public in Nigeria must either register the offering with the SEC or qualify for an exemption.
AML/CFT Obligations
Digital asset businesses are designated as reporting entities under Nigerian AML/CFT law and must meet robust obligations. These include customer identification and verification (KYC), beneficial ownership verification, transaction monitoring, suspicious transaction reporting to the NFIU, record keeping for at least five years, and implementation of a Travel Rule for virtual asset transfers above specified thresholds.
Conclusion
The Nigerian regulatory framework for digital assets is now more developed and clearer than it has ever been, but it remains complex and multi-layered. Businesses operating in the digital assets space need legal advice that covers both the CBN and SEC regulatory dimensions, as well as AML/CFT and tax compliance.
This article is for general information only. For advice on digital assets licensing and compliance in Nigeria, contact Marturion Legal.