Nigeria has recently made a significant stride towards regulating cryptocurrencies with the enactment of the Nigerian Investments and Securities Act (ISA) 2025. This new law, signed by President Bola Ahmed Tinubu, has brought clarity to the status of cryptocurrencies in the country, officially recognizing them as an asset class.
According to Ophi Rume, a local advocate and educator in the crypto space, the amended securities law has put an end to the uncertainty surrounding cryptocurrencies in Nigeria. Rume emphasized that this recognition not only removes the ban on cryptocurrencies but also signals a halt to the harassment faced by individuals involved in these assets by law enforcement agencies.
The Securities and Exchange Commission (SEC) of Nigeria has also weighed in on the new law, stating that it supersedes the Investments and Securities Act No. 29 of 2007. Director-General Emomotimi Agama highlighted that the ISA 2025 empowers SEC Nigeria to drive innovation and provide better protection for investors, ultimately positioning Nigeria as an attractive hub for both local and foreign investments.
In addition to recognizing digital assets and investment contracts as securities, the ISA 2025 brings virtual asset service providers (VASPs) under the regulatory oversight of SEC Nigeria. The law also cracks down on Ponzi schemes, imposing severe penalties, including imprisonment, on promoters of such fraudulent schemes.
While the penalties for Ponzi schemes have been welcomed by industry players, Rume has raised concerns about the adequacy of the fines. He pointed out that a fine of 20 million naira may not be sufficient for platforms that have scammed individuals out of substantial amounts in foreign currency. Rume suggested that amendments be made to ensure that the penalties are proportional to the damages caused.
Looking ahead, Rume urged SEC Nigeria to foster innovation in the crypto market and incentivize foreign crypto firms to enter the Nigerian market by offering tax incentives. By creating a conducive environment for crypto businesses, Nigeria can attract investment and drive growth in the digital asset space.
Overall, the enactment of the Nigerian Investments and Securities Act 2025 marks a pivotal moment in the regulation of cryptocurrencies in Nigeria, providing clarity and a framework for the industry to thrive under regulatory oversight.