ABUJA, Nigeria – Nigeria’s recently passed Investments and Securities Act (ISA) 2024 has introduced significant reforms to the capital market, including the formal classification of cryptocurrencies and other virtual assets as securities for the first time.
This landmark move is expected to enhance transparency and attract more investments into the country’s growing digital asset sector.
President Bola Tinubu signed the ISA 2024 into law, replacing the outdated Investments and Securities Act No. 29 of 2007.
The new law explicitly recognizes virtual and digital assets, as well as investment contracts, as securities.
It brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the regulatory purview of the Securities and Exchange Commission (SEC).
Under the new law, businesses involved in digital assets must now register with the SEC and comply with its guidelines.
This shift aims to curb fraudulent activities in the digital space while fostering trust and encouraging innovation in blockchain technologies.
Emomotimi Agama, Director-General of the SEC, hailed the new legislation as a transformative step for Nigeria’s capital market.
“The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market,” he said.
“By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently, and reposition Nigeria as a competitive destination for local and foreign investments.”
The move to regulate digital assets marks a dramatic shift from Nigeria’s earlier response to cryptocurrencies, which were met with skepticism and regulatory crackdowns.
The rise of cryptocurrencies in 2015, triggered by the oil price crash and the depreciation of the naira, saw many Nigerians turn to digital currencies as a safe haven.
However, the Central Bank of Nigeria (CBN) had previously ordered banks to shut down accounts linked to cryptocurrency transactions, forcing traders to shift to peer-to-peer (P2P) platforms.
Since President Tinubu’s appointment and the easing of restrictions under CBN Governor Olayemi Cardoso in 2023, the government has signaled a more open approach to digital assets.
The ISA 2024 marks a significant step in aligning Nigeria’s regulatory framework with global best practices and creating a more transparent environment for investors.
Oluropo Dada, the 13th President and Chairman of the Chartered Institute of Stockbrokers (CIS), expressed confidence that the new Act would modernize Nigeria’s financial market.
“This Act is a testament to our collective dedication to advancing the capital market and securing its future as a catalyst for economic development,” he said.
“It introduces comprehensive reforms aimed at modernizing the regulatory framework, enhancing investor protection, and creating a more robust platform for economic growth.”
The ISA 2024 also introduces provisions for stronger oversight of Securities Exchanges, the regulation of Commodities Exchanges, and enhanced protections against illegal investment schemes, such as Ponzi schemes.
In addition, the Act provides for the issuance of securities by sub-national entities, improving the flexibility of raising funds for states and their agencies.
As the capital market moves to embrace digital assets, the ISA 2024 is expected to help Nigeria overcome the challenges posed by a rapidly evolving financial landscape.
