Nigeria moves to regulate cryptocurrency amid fraud and volatility concerns! Nigeria, home to Africa’s largest cryptocurrency market, is taking cautious steps toward regulating digital assets after years of uncertainty. However, fraud, scams, and economic instability continue to complicate the process.
Nigeria’s Growing Crypto Adoption
Despite skepticism from government officials, Nigeria ranks second globally—after India—on the crypto adoption index compiled by Chainalysis, a global crypto research firm.
For many Nigerians, cryptocurrencies provide an alternative to the unstable naira, which has suffered significant devaluation in recent years. Digital assets also offer a way to bypass strict banking regulations and financial restrictions.
Nigeria moves to regulate cryptocurrency
Regulatory Push and SEC Approvals
After years of resistance and suspicion, Nigerian regulators are beginning to acknowledge the need for clear policies around cryptocurrency usage.
In August 2024, the country’s Securities and Exchange Commission (SEC) announced that it had granted “Approval-in-Principle” to two cryptocurrency exchanges—Busha Digital Limited and Quidax Technologies Limited—to operate legally in Nigeria.
“We believe this regulatory move is a positive start that will benefit the market in the long run by building trust and stability,” said Buchi Okoro, CEO of Quidax.
“The SEC approval sent a clear signal to potential crypto investors, emphasizing their focus on customer protection.”
However, beyond approving a handful of exchanges, broader crypto regulation remains stalled, largely due to fraud concerns and government skepticism.
Rampant Fraud and Investment Scams
While regulators move cautiously, fraudulent schemes continue to plague Nigeria’s crypto space.
In December 2024, Nigeria’s Economic and Financial Crimes Commission (EFCC) announced the arrest of 792 suspects—including foreigners—in Lagos’ Victoria Island for alleged involvement in crypto investment fraud and romance scams.
Romance scams, where fraudsters pretend to be in love to deceive victims into sending money, are a growing concern. Crypto transactions, due to their anonymity, have made it easier for scammers to operate undetected.
The SEC has also issued multiple warnings about fraudulent companies falsely claiming to be registered crypto exchanges. In November, it flagged Marino FX Limited for misleading investors, but this was just one of many such cases.
Parliament’s Crypto Regulation Efforts
To establish a clear legal framework, Nigeria’s parliament is considering an Investment and Securities Bill that could define digital currencies under Nigerian law.
President Bola Tinubu, during his 2023 campaign, promised to encourage the healthy adoption of digital assets. His stance was seen as a breakaway from his predecessor’s anti-crypto policies, raising hopes for industry players.
However, since taking office, Tinubu’s administration has imposed new restrictions on crypto exchanges, citing concerns about the devaluation of the naira.
Government’s Crackdown on Binance
In February 2024, Central Bank Governor Olayemi Cardoso blamed Binance, the world’s largest crypto exchange, for the naira’s instability.
As a result:
✅ Binance was forced to stop transactions in naira.
✅ Many Nigerian users rushed to withdraw funds, fearing their money would be trapped.
✅ Two Binance executives were arrested, though one later escaped government custody.
✅ Nigeria’s Inland Revenue Service filed an $81.5 billion lawsuit against Binance for operating without registration.
Money Laundering and National Bitcoin Strategy
Despite the crackdown, some industry leaders remain optimistic about Nigeria’s regulatory direction.
“Despite the strong headwinds we have faced, we are seeing a turnaround in the government’s approach to innovation in the sector,” said Laolu Biyi Samuel, co-founder of Busha Digital Limited.
The United States’ recent move to establish a “strategic Bitcoin reserve” has sparked speculation that Nigeria could follow suit. Experts argue that embracing crypto strategically could boost Nigeria’s economy.
However, there are serious concerns that cryptocurrencies are being used for money laundering and terrorism financing. With high volatility and a weak social safety net, poorly managed investments could leave millions of Nigerians financially vulnerable.
What’s Next?
Industry leaders are now calling for clear regulatory policies.
“Regulatory clarity should be a top priority,” said Obinna Iwuno, president of the Stakeholders in Blockchain Association of Nigeria (SiBAN).
“It is not too late to start discussing a national Bitcoin strategy and action plans.”
With rising global interest in digital assets, Nigeria’s next steps in crypto regulation will determine whether the country can harness its benefits or remain vulnerable to scams and financial instability.
