Nigeria Crypto Exchange Restrictions 2025: What Citizens Need to Know

Aug, 12 2025

When the Investments and Securities Act (ISA 2025) finally landed on the books, it turned Nigeria’s crypto scene upside down. Suddenly, what was once a black‑market hobby became a regulated activity that banks, regulators, and everyday traders have to navigate. If you’re a Nigerian looking to trade, invest, or simply understand which exchanges you can safely use, this guide breaks down the current restrictions, the licensing maze, and the real‑world tricks that help you stay on the right side of the law.

Quick Takeaways

• ISA 2025 classifies most digital tokens as securities, so every crypto exchange must be licensed by the SEC.
• The Central Bank of Nigeria (CBN) now permits banks to service licensed VASPs, but non‑licensed platforms are still blocked.
• Key local players - Quidax and Busha - have received early SEC approval; most international exchanges are still applying.
• Compliance hinges on AML/CFT checks, NFIU reporting, and regular audits.
• Enforcement is uneven: police raids still happen, so verify licensing before you trade.

Why the Rules Changed: A Brief History

Nigeria cryptocurrency regulation is a set of laws and guidelines that govern how digital assets are created, traded, and used for payments within the country. It evolved dramatically after a series of policy flips.

From 2021 to 2023, the Central Bank of Nigeria (CBN) imposed a blanket ban on crypto transactions, forcing banks to cut ties with any crypto‑related activity. The ban was meant to protect the financial system but ended up pushing traders onto peer‑to‑peer (P2P) platforms, where Nigeria now leads the world with over 22 million active users.

In December 2023, the ban was lifted, and CBN issued guidelines that allowed banks to maintain relationships with licensed Virtual Asset Service Providers (VASPs). The real turning point arrived in March 2025 when President Bola Ahmed Tinubu signed ISA 2025 into law. The act officially recognizes digital assets as securities and creates a licensing regime overseen by the Securities and Exchange Commission (SEC).

Current Licensing Landscape

Under ISA 2025, any platform that lets Nigerians buy, sell, or hold crypto must register with the SEC. The licensing process involves three major steps:

1. Application Submission: Operators submit a detailed business plan, AML/CFT policies, and proof of capital to the SEC.
2. Regulatory Vetting: The SEC, together with the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU), reviews the application for compliance with anti‑money‑laundering standards.
3. Approval and Ongoing Supervision: Once approved, the exchange receives a license that must be renewed annually, and the SEC conducts periodic audits.

Early approvals went to home‑grown platforms Quidax and Busha, which have built compliance teams around the new rules. International exchanges like Binance and Coinbase have announced intentions to apply, but the vetting process can take six months or longer due to the depth of required documentation.

What Restrictions Still Apply?

Even with the new framework, several practical restrictions remain for Nigerian citizens:

• Banking Access: Only banks that have signed MoUs with the SEC‑approved VASPs can hold crypto‑related accounts. Unlicensed exchanges cannot open bank accounts, making fiat‑to‑crypto conversions trickier.
• AML/CFT Reporting: Every transaction above NGN 500,000 triggers a mandatory report to the NFIU. Exchanges must capture full KYC data, including biometric verification for many users.
• Taxation in Development: The SEC is drafting tax rules that will likely impose a capital gains tax on crypto profits. While the exact rate isn’t public yet, businesses are preparing to withhold tax at source.
• Asset Classification: Investment‑focused NFTs are now treated as securities, while purely artistic NFTs escape SEC oversight. This split can affect how platforms list and market NFTs.
• Law Enforcement Actions: Despite the legal clarity, police raids on unlicensed operators continue. Users have reported intimidation tactics, so confirming a platform’s license status before trading is essential.

How to Spot a Licensed Exchange

Identifying a compliant platform is easier now that the SEC publishes a public register. Follow these steps:

1. Visit the SEC’s Licensed VASP Register page (search for ‘SEC Nigeria VASP Register’).
2. Check the license number listed for the exchange. Licensed platforms display the number prominently on their homepage.
3. Verify the KYC process: licensed exchanges must ask for a valid national ID, proof of address, and a selfie for facial verification.
4. Look for a clear AML policy link. The document should reference NFIU reporting guidelines.
5. Confirm that the exchange’s bank partner is listed on the CBN’s approved VASP‑banking partners list.

If any of these items are missing, it’s safer to stay away until the exchange secures its license.

Practical Challenges for Everyday Traders

Even with a licensed exchange, Nigerian users still hit hurdles:

• Bank Delays: Some banks take days to approve VASP‑linked accounts, slowing down fiat deposits.
• Connectivity Issues: Rural traders often rely on mobile data; occasional network throttling can interrupt trading sessions.
• High Transaction Fees: AML compliance adds extra verification steps, which some platforms charge extra for.
• Enforcement Uncertainty: Police reports indicate that even licensed users sometimes face harassment, especially if using platforms that are perceived as “foreign.”

To mitigate these problems, many traders keep a small buffer of fiat in a regular bank account, use local exchanges like Quidax for quick trades, and maintain a record of all KYC documents in case they’re asked for proof.

Future Outlook: What’s Next for Nigerian Crypto?

The regulatory environment is still maturing. Key developments to watch in the next 12‑18 months:

• Tax Framework Rollout: The SEC expects to release detailed tax guidelines by mid‑2026. Early adopters are already setting up internal accounting to handle potential withholdings.
• Cross‑Border Crypto Corridors: Negotiations between CBN and Kenya’s Capital Markets Authority aim to create a West‑East African crypto corridor that could lower transaction costs.
• Innovation Hubs: Lagos‑based fintech accelerators are receiving seed funding to build blockchain solutions that comply with ISA 2025, opening doors for startups.
• Regulatory Harmonization: The African Union is drafting a continent‑wide digital asset framework, and Nigeria’s model is being used as a reference point.

In short, if the government can keep enforcement consistent and finish the tax rules, the country could become the “FinTech capital of Africa.” Traders who adapt early to the licensing requirements stand to benefit from a more stable ecosystem and potentially attract foreign investment.

Comparison: Pre‑2025 vs. Post‑ISA 2025 Restrictions

Step‑by‑Step: Registering as a Licensed VASP (for entrepreneurs)

1. Prepare a comprehensive business plan outlining services, target market, and compliance procedures.
2. Develop AML/KYC policies that meet NFIU standards, including biometric verification.
3. Secure a minimum capital reserve of NGN 100 million (or equivalent in USD) as required by the SEC.
4. Submit the application through the SEC’s online portal, attaching legal documents, AML policy, and capital proof.
5. Engage with the EFCC for a background check; respond promptly to any queries.
6. Once approved, display the license number publicly and integrate with an SEC‑approved banking partner.
7. Schedule annual audits and submit quarterly AML reports to the NFIU.

Following these steps reduces the risk of rejection and speeds up the time to market.

Frequently Asked Questions

Final Checklist for Nigerian Crypto Users

• Confirm the exchange appears on the SEC’s licensed VASP register.
• Ensure the platform’s bank partner is approved by CBN.
• Complete full KYC with biometric verification.
• Keep records of all deposits, withdrawals, and trades for potential tax reporting.
• Stay updated on SEC announcements - regulatory tweaks happen quarterly.

By following these steps, you can navigate the new landscape confidently and avoid the pitfalls that still linger from the pre‑2025 era.