Nigeria Recognizes Crypto as Securities Under New Investments and Securities Act 2024
Nigeria President Bola Ahmed Tinubu has signed the Investments and Securities Act 2024 (ISA 2024) into law, officially recognizing cryptocurrencies as securities in the country. This move repeals the Investments and Securities Act No. 29 of 2007 and places digital assets under the legal jurisdiction of the Nigerian Securities and Exchange Commission (SEC).
The new act aims to protect investors and crack down on fraudulent activities by imposing strict penalties, including at least 10 years of imprisonment for individuals convicted of Ponzi schemes. Businesses dealing in digital assets are now required to register with the relevant regulatory agency, strengthening oversight in the cryptocurrency market.
Expert Opinions on the ISA
Chairman of the Council Chartered Institute of Stockbrokers (CIS), Oluropo Dada, praised the enactment of ISA 2024 for enhancing transparency, efficiency, and stability in the financial market. This regulatory framework modernization is seen as a positive step towards improving investor protection and market integrity.
“As capital market professionals, we are confident that this Act will deepen market integrity, boost investor confidence, and expand the range of investment opportunities available to Nigerians and global investors alike.”
The newly introduced act also categorizes securities exchanges into Composite and Non-composite exchanges, with Composite exchanges able to host all categories of securities while Non-composite exchanges focus on a singular type of products. Additionally, tougher penalties are imposed on individuals involved in Ponzi schemes, with a minimum 10-year prison term and a monetary fine of up to 40 million Naira ($26,000).
SEC Director General Emomotimi Agama expressed confidence in the resilience of the capital market, attributing the new act to the collaborative efforts of stakeholders within and outside the market community.
Nigeria, known as one of the largest cryptocurrency markets globally, has seen regulatory changes impacting the industry. The Central Bank of Nigeria had previously instructed banks to close accounts linked to crypto transactions, leading traders to use peer-to-peer exchanges. However, President Bola Tinubu’s administration has taken a more favorable stance on crypto, easing restrictions and pursuing legal action against Binance for alleged economic losses.
Recent updates reveal that Nigeria is considering taxing crypto transactions through regulated exchanges, highlighting ongoing efforts to regulate the digital asset market and promote economic growth.