Crypto is Legal in Nigeria, Until . . .

Until the SEC and CBN clarify their roles - and ideally issue a joint framework - many institutions will continue to act defensively.

Despite legal reforms, Nigerian banks continue to freeze accounts linked to cryptocurrency activity. Arrests persist. Confusion reigns. For a country trying to become Africa’s tech capital, Nigeria’s crypto regulation is sending mixed messages.

When Nigeria passed the Investment and Securities Act (ISA), 2024, it appeared to mark a new chapter for the country’s crypto ecosystem. The law formally granted the Securities and Exchange Commission (SEC) authority over digital assets, which many interpreted as a clear signal: crypto is now legal.


But on the ground, the situation remains murky. Crypto users still face frozen accounts, red flags from banks, and – in some cases – the threat of arrest. If the law has changed, why hasn’t the experience of using crypto in Nigeria?

The confusion stems from a long-standing tug-of-war between regulators. In 2021, the Central Bank of Nigeria (CBN) issued a directive barring financial institutions from facilitating crypto transactions – essentially cutting crypto off from the banking system.


While the CBN lifted that restriction in late 2023, it did so quietly, with little public guidance, leaving banks unsure of how to proceed.


In practice, not much has changed.

“We still restrict crypto-linked accounts,” said an operations staff member at a leading Nigerian fintech. “It’s just not worth the risk.”

 

Another widely-used fintech product even displays a notice:

“In accordance with CBN regulations, accounts dealing with cryptocurrency transactions will be restricted.”

 

These warnings have had a chilling effect.

Individuals have reported having their bank accounts frozen simply for receiving funds that passed through a crypto intermediary. Others say they’ve been detained or interrogated by authorities – not for breaking any laws, but for being caught in a gray zone where policy says one thing and practice says another.


A senior CBN staff member, who requested anonymity, described the situation as “dicey.”

“Implementation is different from signing something into law.”

BitKE Insights: What the New Law Actually Changes

According to reporting by BitKE, one of Africa’s leading crypto media platforms, the ISA 2025 does establish a legal framework for digital asset services – but with conditions.

  • Crypto exchanges and wallet providers must register and obtain licenses from the SEC.
  • The Act allows the SEC to classify cryptocurrencies as securities, giving it enforcement powers and investor protection mandates.
  • However, the CBN remains the primary authority over monetary policy and banking operations, meaning banks can still determine how – or if – they engage with crypto-related transactions.

This regulatory overlap has created a gap between de jure (what the law allows) and de facto (what happens in practice). BitKE notes that while some companies are actively seeking licensing, the dual oversight is creating uncertainty.

Until the SEC and CBN clarify their roles – and ideally issue a joint framework – many institutions will continue to act defensively.

 

South Africa Offers a Contrast

While Nigeria hesitated, South Africa moved decisively. In 2022, the Financial Sector Conduct Authority (FSCA) designated crypto assets as financial products. By 2024, over 248 companies were licensed to operate within the country’s regulatory framework.


African firms – and even international players – are choosing South Africa over Nigeria because the rules are clearer. South Africa may not have all the answers, but it has created a baseline of predictability – something Nigeria is still struggling to provide.

 

What Needs to Happen

  • Regulatory Alignment
    The CBN and SEC must align on crypto policy. Competing or contradictory guidance only fuels uncertainty. A joint circular or regulatory framework would go a long way in restoring confidence among users and businesses.
  • Clearer Communication
    Authorities must proactively educate the public and financial institutions about the new legal landscape. The current opacity is not just confusing – it’s dangerous. Advocacy groups and tech leaders must also step up, just as they have in Kenya, where regular dialogue with regulators has led to more nuanced, responsive policies.
  • Consistent Enforcement
    Finally, policy must match enforcement. Nigerians should not be penalized for operating in a space the government now claims to support. The threat of arrest or asset seizure must be eliminated if crypto is truly legal.

 

So, Is Crypto Legal in Nigeria?

Legally? Yes.

Practically? It depends on who you ask – or which bank you use.

 

Until the CBN and SEC speak with one voice, and enforcement reflects policy, Nigeria’s crypto sector will remain in limbo.

 

 

 

 

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