Nigeria's Investment and Securities Act 2025 Revolutionizes Ownership and Use of Virtual and Digital Assets

Strategic Insights -

The Investment and Securities Act (ISA) 2025, enacted by President Bola Ahmed Tinubu on March 31, 2025, has significantly impacted the ownership and use of digital and virtual assets in Nigeria. The Act updates the law with provisions that impact emerging trends, global standards, and recent developments in the Nigerian Capital Market. Specifically, the ISA 2025 has introduced significant changes to the definition of securities, recognizing the ownership and use of virtual and digital assets, including cryptocurrencies, Non-Fungible Tokens (NFTs), and digital currencies.

Key Takeaways:

  • The ISA 2025 has expanded the definition of securities to include virtual and digital assets, such as cryptocurrencies, NFTs, and digital currencies, which can now be lawfully owned, transferred, and traded in Nigeria.
  • The Act recognizes Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges as capital market operators under the regulatory purview of the Securities and Exchange Commission (SEC).
  • Investors and innovators have the assurance of regulatory protection for their investments in virtual and digital assets in Nigeria, with exchanges, trading platforms, brokers, and crypto service providers required to register with the SEC and implement anti-money laundering (AML), counter terrorism financing (CFT), and know-your-customer (KYC) measures.
  • The ISA 2025 has made the Nigeria capital market appealing to the younger demographic, introducing new investment opportunities and improving portfolio diversification by stakeholders in the Nigeria capital market.
  • The Act has classified securities exchanges as either Composite Securities Exchanges or Non-composite Securities Exchanges, with Composite Securities Exchanges permitted to facilitate the listing and trading of all types of securities and virtual and digital assets.
  • The definition of 'securities exchange' has been expanded to include organized facilities which provide infrastructures for the offer, bids, and trading of virtual and digital assets for transaction purposes, requiring platforms facilitating crypto and other digital and virtual asset transactions to be registered with the SEC.

Statistics:

  • The ISA 2025 was enacted on March 31, 2025, by President Bola Ahmed Tinubu.
  • The Act updates the law with provisions impacting emerging trends, global standards, and recent developments in the Nigerian Capital Market.
  • The SEC is now authorized to regulate virtual and digital asset market activities, providing regulatory protection for investors and innovators.
  • Exchanges, trading platforms, brokers, and crypto service providers must register with the SEC and obtain appropriate licenses before commencing operations.
  • These entities must also implement AML, CFT, and KYC measures, curbing fraudulent financial activities within the sector.

Sources:

  • The Investment and Securities Act (ISA) 2025.
  • President Bola Ahmed Tinubu.
  • Securities and Exchange Commission (SEC).
  • Central Bank of Nigeria (CBN).
  • Nigeria Capital Market.