The regulatory landscape for cryptocurrencies in Nigeria is undergoing a pivotal transformation. The newly updated Investment and Securities Act (ISA) 2025 now formally classifies virtual and digital assets as securities, signaling a paradigm shift in how the Nigerian Securities and Exchange Commission (SEC) intends to regulate the fast-growing crypto ecosystem.

While the development is being hailed by many industry stakeholders as a long-overdue recognition of the digital asset class, experts are urging caution and compliance awareness. The inclusion of cryptocurrencies under the definition of securities places them squarely within the SEC’s regulatory purview, triggering the need for regulatory compliance, licensing, and robust compliance risk assessment by crypto service providers.

Echoes from Ripple: A Cautionary Precedent

Nigeria’s move mirrors regulatory actions taken in other jurisdictions. Notably, the U.S. SEC’s high-profile legal battle with Ripple Labs over the sale of XRP highlighted the disruptive consequences of treating a digital asset as a security. The case led to market instability, token delistings, and prolonged uncertainty—issues Nigeria’s crypto startups could soon face if regulatory clarity is not promptly established.

A nuanced 2023 court ruling on Ripple found that XRP was not a security when sold to retail investors but was one in institutional offerings—underscoring how token classifications can vary based on issuance and promotion methods.

What This Means for Nigerian Crypto Assets

Legal experts caution that without a detailed framework, ambiguity will persist. According to Adebare Akinwunmi, digital assets lawyer and Partner at CrestHall Attorneys, only assets that qualify as investment contracts involving pooled capital with expectations of profit sharing would likely fall under the SEC’s focus. However, the lack of regulatory intelligence on token types—such as utility tokens, governance tokens, and payment-focused cryptocurrencies—leaves room for interpretation and confusion.

This grey area is further complicated by the fact that the SEC’s Rules on Digital Asset Issuance, Offering Platforms, and Custody provide only a partial breakdown, referencing Initial Coin Offerings (ICOs) and Security Token Offerings (STOs) but leaving much unexplained about newer token models.

Enforcement and Jurisdiction: A Regulatory Conundrum

Nigeria’s SEC faces significant hurdles in enforcement. The decentralized nature of most crypto projects makes it difficult to identify accountable parties. Many tokens are governed by anonymous developers or distributed networks without any operational footprint in Nigeria.

Even if local compliance is mandated, enforcing regulatory reporting, internal controls, or AML software requirements on globally active protocols will be challenging. Moreover, Nigerian startups with internationally adopted tokens could find themselves entangled in multi-jurisdictional regulatory compliance.

The retroactive classification of existing tokens as securities may also create disruptions. Questions linger about whether Nigerian exchanges will be forced to halt trading or delist non-compliant tokens.

Stablecoins in the Spotlight

Stablecoins are next in line for regulatory scrutiny. Akinwunmi confirmed that only licensed financial institutions are currently allowed to issue them, indicating an intentional push by regulators to keep stablecoin issuance under the Central Bank of Nigeria’s (CBN) authority.

For globally circulating tokens like USDT, Nigeria may adopt a regulatory approach inspired by the EU’s Markets in Crypto-Assets Regulation (MiCA), which demands reserve transparency, licensing, and operational oversight.

Given their increasing use for remittances, savings, and cross-border transactions, stablecoins are likely to be subjected to regulatory enforcement, possibly including transaction volume caps, reserve audits, and compliance monitoring tools.

The Road Ahead: Collaboration Over Conflict

As Nigeria embarks on this complex regulatory journey, stakeholders across the crypto value chain—exchanges, startups, legal advisors, and developers—must prepare for compliance audits, evolving regulatory frameworks, and compliance management systems.

While the formal recognition of digital assets offers new legitimacy, it also signals a tightening regulatory grip. The challenge ahead lies in creating a regulatory compliance framework that balances financial innovation, investor protection, and systemic risk mitigation without stifling growth.

The message is clear: the future of Nigeria’s crypto ecosystem will be shaped not by resistance but by strategic compliance consulting, regulatory dialogue, and RegTech solutions that bridge the gap between innovation and oversight.