Nigeria’s SEC Recognizes Crypto as Securities: What It Means for the Industry
In a landmark move, Nigeria’s Securities and Exchange Commission (SEC) has officially classified cryptocurrencies as securities under the newly updated Investment and Securities Act (ISA) of 2025. This shift gives cryptocurrencies legal standing in Nigeria, marking a significant milestone for the industry. While many in the crypto space view this as a positive development, experts caution that the classification may come with complexities that could challenge innovation.
The U.S. Securities and Exchange Commission (SEC) has had similar experiences, most notably in its lawsuit against Ripple Labs, which highlighted the risks and uncertainties of classifying cryptocurrencies as securities. While Ripple’s case brought major disruptions, it also exposed the legal and financial challenges crypto companies face when their tokens are regulated as securities. This history serves as a reminder to Nigerian crypto firms that clarity in how regulations are applied is crucial for minimizing confusion and legal challenges.
Despite the recognition of cryptocurrencies as securities, the Nigerian SEC’s rules remain somewhat vague on how specific crypto assets will be classified. Digital assets lawyer Adebare Akinwunmi explained that only those assets involving “contributions of individuals towards a company’s trading capital” with expectations of profit might qualify. This definition leaves much room for ambiguity, as many cryptocurrencies serve different purposes, such as payments, governance, or utility, making the classification process a challenging task.
Furthermore, the SEC’s efforts to regulate the decentralized nature of cryptocurrencies may face significant hurdles. Most crypto projects operate without centralized entities, making it difficult for the SEC to enforce compliance. As Nigeria navigates this new regulatory landscape, the SEC is also expected to tighten rules on stablecoins, which are rapidly gaining popularity in the country. The regulatory framework for these digital assets will likely mirror international standards, ensuring proper licensing, transparency, and risk management to avoid financial instability.