Nigeria Compliance Report

Regulatory Overview

Regulatory Status

Some rules exist but significant gaps; draft legislation or limited guidance

Key Regulator(s)

Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Communications Commission

Risk Level

high

Primary Legislation

Investments and Securities Act 2025, Finance Act 2023: Established the foundational tax framework for cryptocurrencie

Travel Rule

Not adopted — Threshold: $1,000

Tax Reporting

Tax framework for crypto under development; FIRS exploring reporting requirements. Rate: Flat 10% on gains (sales proceeds minus allowable disposal expenses).. Applies to disposal via sale, exchange for fiat/other crypto, or use for goods/services.. Losses offset only crypto gains, not other income.. Entities must compute, pay, and file self-assessment returns twice yearly (by June 30 and December 31).

Key Facts

• aml NFIU's Mandate: NFIU receives mandatory reports (e.g., Suspicious Transaction Reports within 24 hours) from Financial Institutions (FIs), Other Financial Institutions (OFIs), and DNFBPs. Businesses must register as reporting entities on the NFIU's goAML portal, submitting documents like CAC registration, industry regulator licenses (e.g., CBN, SEC), and compliance officer details. SCUML's Mandate: SCUML enforces AML/CFT rules for DNFBPs (e.g., lawyers, accountants, real estate agents), including registration (with certificate issuance), risk-based customer due diligence (CDD), internal compliance programs, record-keeping, staff training, and reporting suspicious activities to NFIU. From January 1, 2026, all DNFBP reports must use the SCUML portal exclusively. Shared Framework: Both operate under laws like the Money Laundering (Prohibition and Prevention) Act (MLPPA). DNFBPs report to NFIU but are supervised by SCUML, while FIs report directly to NFIU via regulators like CBN or SEC. All entities must conduct KYC/CDD, risk assessments, and file timely reports to align with FATF/GIABA standards.
• enforcement Regulator: Economic and Financial Crimes Commission (EFCC) Entity Targeted: Over 1,100 (specifically 1,146) bank accounts of crypto traders and peer-to-peer merchants. Violation Type: Foreign-exchange racketeering, currency (naira) manipulation, money laundering, terrorism financing. Penalty Amount: Not specified (accounts frozen, no fines detailed). Date: Accounts frozen as part of an ongoing investigation starting early 2024; court order obtained by April 2024 (90-day investigation period noted) Outcome: Accounts frozen pending investigation completion; EFCC part of interagency task force probing naira manipulation linked to platforms like Binance. Investigation ongoing with potential blocks on fund retrieval even if court-ordered Source URL: https://www.dlnews.com/articles/regulation/nigeria-efcc-crackdown-crypto-traders-merchants/ Central Bank of Nigeria (CBN) introduced strict AML checks on crypto firms (2024-2026), but no entities, penalties, or outcomes specified. Nigerian Securities and Exchange Commission (SEC) requires VASP registration under Investments and Securities Act 2025; non-compliance risks license revocation (no dated actions). New frameworks mandate national ID linkage for transactions and naira delisting from P2P exchanges (2024-2026), with penalties like license loss for unreported transactions.
• general Security Tokens: Deemed securities under ISA Part XVIII (315); exhibit features like equity/bond characteristics. Crypto Assets (e.g., non-fiat virtual currencies): Treated as commodities if traded on a Recognized Investment Exchange or issued as investments; otherwise presumed securities. Utility Tokens: Treated as commodities; spot trading exempt from SEC unless on a Recognized Investment Exchange. Derivatives/Collective Investment Funds of the above: Regulated as specified investments under ISA and SEC Rules. Investments and Securities Act (ISA), Part XVIII (Section 315): Defines securities. SEC Rules and Regulations, Part E: Covers commodity treatment on exchanges. Key Guidance: SEC Statement on Digital Assets and Their Classification and Treatment; SEC Statement Webpage. Copy of the investment agreement or loan instrument evidencing the interest payment.
• licensing SEC Nigeria — VASP licensing, digital asset exchange regulation CBN — Banking restrictions (banned bank servicing Feb 2021, partially reversed Dec 2023), eNaira CBDC NFIU/SCUML — Financial intelligence, AML compliance SEC Nigeria Rules on Virtual Assets (2024) — VASP licensing — exchange, offering platform, custody, broker-dealer categories VASP: VASP License from SEC Nigeria. Exchange: NGN 500M (~$320K USD). Offering Platform: NGN 100M. Custody: NGN 2B. Broker-Dealer: NGN 100M. 3-6 months. Highest crypto adoption in Africa. Framework is new — enforcement capacity limited. CUSTODY: Digital Asset Custody license — NGN 2B minimum capital EXCHANGE: Digital Asset Exchange license — NGN 500M minimum capital. Naira volatility and FX controls drive massive P2P trading. CBN launched eNaira partly as alternative to crypto. Digital Assets Exchanges (DAX): Full license for trading platforms.
• securities Securities and Exchange Commission (SEC): Responsible for regulating securities markets, including digital assets classified as securities. Central Bank of Nigeria (CBN): Oversees financial institutions and may regulate certain crypto activities under the Financial Crimes Enforcement Network (FACENET). Investments and Securities Act, 2007 (ISA) No. 29 of 2007: Provides comprehensive legal provisions for securities regulation. Status: Repealed by ISB 2025. Investments and Securities Bill, 2025 (ISB): Assented to on February 28, 2026, repealing ISA 2007 and modernizing regulatory frameworks. Member of the Financial Services Regulation Coordinating Committee (FSRCC) and IOSCO, aligning with global securities regulation standards. Entities Requiring License: Any entity offering tokenized securities or digital asset services that are classified as securities must register with the SEC. Submit an application through the SEC's ePortal for full electronic registration.
• status Nigeria regulatory status: partial, enforcement-gap, cbdc-active
• tax Tax framework for crypto under development; FIRS exploring reporting requirements Rate: Flat 10% on gains (sales proceeds minus allowable disposal expenses). Applies to disposal via sale, exchange for fiat/other crypto, or use for goods/services. Losses offset only crypto gains, not other income. Entities must compute, pay, and file self-assessment returns twice yearly (by June 30 and December 31). Trading/investing gains: Often CGT if capital in nature; frequent trading may be income. Mining, staking, DeFi rewards: Taxed as income; individuals at 0-25% progressive rates (0% if under ₦800,000/year); miners may be self-employed. Businesses/corporates: Standard corporate income tax applies to crypto-derived profits.
• travel rule Nigeria is actively taking strides toward Travel Rule implementation but has not yet enacted legislation or made it operational, per 2026 global status reports. Globally, 99 jurisdictions have enacted or are enacting Travel Rule legislation (FATF Recommendation 16), but Nigeria falls into the "in process" category without confirmed live status. No effective date has been established or scheduled for Nigeria, unlike jurisdictions such as Australia (31 July 2026) or Brazil (2 February 2027). No Nigeria-specific threshold is defined, as implementation is pending. FATF recommends a global de minimis of $1,000/€1,000, but jurisdictions set their own (or none), with varying rules above/below it. No specific coverage details for Nigeria, pending framework development. In implemented jurisdictions, the rule applies to VASPs handling virtual asset transfers, requiring collection and exchange of originator/beneficiary information. No Nigeria-specific requirements issued. Globally, VASPs must collect/share sender/recipient details (e.g., name, account, address) before/during transactions, facing challenges like interoperability and no mandated tech solutions. No penalties specified for Nigeria due to lack of implementation. Globally, enforcement is uneven, with ~59% of jurisdictions with laws yet to issue findings or actions.

Sources

• https://www.dlnews.com/articles/regulation/nigeria-efcc-crackdown-crypto-traders-merchants/
• https://sec.gov.ng/documents/38/SEC-STATEMENT-ON-DIGITAL-ASSETS-AND-THEIR-CLASSIFICATION-AND-TREATMENT_11920.pdf
• https://sec.gov.ng/keep-track-of-fintech-news/statement-on-digital-assets-and-their-classification-and-treatment/
• https://sec.gov.ng/our-mandate/regulation/
• https://sec.gov.ng/search/
• https://www.sec.gov.ng/
• https://kpmg.com/us/en/taxnewsflash/news/2025/12/tnf-nigeria-guidance-on-withholding-tax-on-interest-from-short-term-securities-duty-free-threshold-for-low-value-imports-tax-administration-reform.html
• https://sec.gov.ng/about/resources/templates/amlcft-returns-template/
• https://sec.gov.ng/for-investors/find-a-registered-operator/
• https://sec.gov.ng/about/contact-us/
• https://sec.gov.ng/documents/1319/Investments_and_Securities_Act_2025_x9rSXtI.pdf
• https://taxsummaries.pwc.com/nigeria/individual/significant-developments
• https://sec.gov.ng
• https://cbn.gov.ng
• https://nfiu.gov.ng
• https://sec.gov.ng/documents/8/Rules-on-Issuance-Offering-and-Custody-of-Digital-Assets.pdf
• https://ofac.treasury.gov/faqs/topic/1626
• https://sanctionssearch.ofac.treasury.gov
• https://www.sanctionscanner.com/blog/list-of-sanctioned-countries-by-ofac-un-and-eu-2025-1103
• https://www.youtube.com/watch?v=8pw_P7r6sMQ
• https://www.cbn.gov.ng
• https://www.sec.gov.ng
• https://www.ncc.gov.ng/node/870
• https://www.fatf-gafi.org
• https://www.cbn.gov.ng/PressRelease.asp?id=1234
• https://www.trade.gov/country-commercial-guides/nigeria-licensing-requirements-professional-services
• https://licence.nmcn.gov.ng/Account
• https://flaringventingregulations.worldbank.org/nigeria
• https://www.ssrn.com/abstract=3411906
• https://www.ssrn.com/abstract=5970774
• https://www.cbn.gov.ng/
• https://sec.gov.ng/for-investors/keep-track-of-circulars/commencement-of-full-electronic-registration-e-registration-on-the-commissions-eportal/
• https://sec.gov.ng/about/international-relations/
• https://openknowledge.worldbank.org/server/api/core/bitstreams/3af2b263-4612-5245-9a72-60354c0fd269/content
• https://sec.gov.ng/about/international-relations/sec-and-iosco/
• https://nscdc.gov.ng/
• https://sec.gov.ng/about/
• https://www.kpmg.com
• https://sec.gov.ng/enforcements/