Nigeria's New Investment Act (ISA) 2025 Officially Recognizes Cryptocurrencies as an Asset Class

The Nigerian Investments and Securities Act (ISA) 2025, recently signed into law by President Bola Ahmed Tinubu, has effectively ended the uncertainty surrounding the status of cryptocurrencies.

Nigeria has taken a significant step towards regulating cryptocurrencies with the signing of the Nigerian Investments and Securities Act (ISA) 2025 into law.

The new act, which amends the Investment and Securities Act No. 29 of 2007, has effectively ended the uncertainty surrounding the status of cryptocurrencies in the country.

According to Ophi Rume, a local crypto advocate and educator, the amended securities law “officially” introduces cryptocurrencies as an asset class.

This recognition by the new act ends the uncertainty around cryptocurrencies and also means they are no longer banned assets.

The development will also see law enforcement agencies that were “harassing” people involved with these assets stop, Rume added.

The new act also places virtual asset service providers (VASPs) under SEC Nigeria’s regulatory purview.

The apex securities regulator said the new act will enable it to efficiently foster innovation and protect investors.

The new law repositioned Nigeria as a competitive destination for local and foreign investments, the regulator noted.

Announcing the commencement of the ISA 2025, SEC Nigeria’s Director-General, Emomotimi Agama, said the 2007 act had served the nation well in the past 16 years.

“It is time for us to move on to a more advanced legal framework that meets the evolving needs of our capital market and the broader economy,” Agama said.

The SEC official explained that the new act, which was signed by President Bola Ahmed Tinubu on January 1, 2024, introduces several critical changes to the legal and regulatory landscape of the securities market in Nigeria.

Among these changes is the express recognition of digital assets and investment contracts as securities, and the introduction of a comprehensive regulatory regime for VASP activities.

The new law also contains provisions to prohibit and penalize Ponzi schemes, with promoters facing significant financial penalties of up to 20 million naira ($13,000) and/or imprisonment terms of five years.

While the proposed penalties for Ponzi schemes have been welcomed by players in Nigeria’s crypto industry, Rume warns that this section will have to be amended to ensure the financial penalties remain commensurate.

This is because the fine of 20 million naira may seem small for a platform that has scammed a lot of people out of huge amounts of money in dollars, let’s say $500,000. The fine will be something to easily do away with,” the educator said.

Overall, Rume said SEC Nigeria should encourage innovation in the crypto market and offer tax holidays to foreign crypto firms looking to enter the country.