Key Highlights
- •House of Reps urges security agencies not to label young Nigerians in crypto as fraudsters.
- •Lawmakers call for collaboration between regulators and the inclusion of women in digital policy.
- •The committee plans to create Nigeria’s first full legal and regulatory framework for cryptocurrency.
Addressing Crypto Concerns in Nigeria
The Nigerian House of Representatives has urged security agencies to stop labeling young Nigerians involved in cryptocurrency and blockchain activities as internet fraudsters. This call was made on Monday during a public hearing held by the Ad-Hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and Point-of-Sale (PoS) Operations at the National Assembly Complex in Abuja.
The session, chaired by Olufemi Bamisile, brought together lawmakers, regulators, fintech operators, blockchain associations, and crypto exchange leaders to discuss how to regulate digital finance without stifling innovation.
Bamisile stated that the committee’s aim is not to clamp down on technology but to guide the government in creating effective laws. He emphasized, "Our goal is to create a framework that supports innovation without compromising security or financial integrity."
He warned against "misplaced aggression" by some agencies, particularly the Economic and Financial Crimes Commission (EFCC) and the Nigeria Financial Intelligence Unit (NFIU). Bamisile asserted that not every young person with a laptop and crypto wallet is a fraudster, urging security agencies to build technical knowledge of blockchain operations to avoid harassing innocent innovators.
Collaboration and Inclusion in Digital Policy
Other lawmakers, including Kama Nkemkama and Akinosi Gboyega, echoed Bamisile’s sentiment. They highlighted the hearing as an opportunity to bring law enforcement and technology experts together to plan the country's progression in the digital economy. Many described the hearing as a historic moment, marking the first broad discussion between the National Assembly and verified crypto operators.
Mawahin Adams, co-founder of Nigeria Women Bitcoiners, advocated for the inclusion of women's voices in digital policy. She proposed a National Digital Asset Literacy and Inclusion Programme and suggested allocating a portion of crypto regulatory fees to fund education and awareness initiatives.
Navigating Regulation, Taxes, and Technology
Lawmakers also deliberated on the balance between regulation and taxation. They proposed that strong collaboration between the Central Bank of Nigeria (CBN) and other regulatory bodies, such as the Securities Exchange Commission and the National Information Technology Development Agency, is essential.
Blockchain expert Oye Benson suggested that Nigeria should develop its own local regulatory tools to monitor transactions and promote transparency.
The committee is expected to present its final report soon, which will contribute to the creation of Nigeria’s first comprehensive legal and regulatory framework for cryptocurrency and digital finance.
Nigeria's Evolving Relationship with Cryptocurrency
Nigeria's engagement with cryptocurrency has been characterized by significant interest, excitement, and regulatory challenges. The emergence of the MMM Ponzi scheme in 2016 introduced many Nigerians to Bitcoin. Despite the financial losses experienced by many, this event sparked an interest in digital currency, with many young Nigerians viewing it as a potential avenue for financial gain amidst the country's inflation.
As the naira has depreciated and the cost of goods has increased, more young people have turned to crypto as a safe haven asset. Consequently, Nigeria has become one of the world's largest crypto markets, with millions actively trading or investing in digital assets.
The prominence of Bitcoin increased further during the EndSARS protests in 2020. During this period, Bitcoin was used to raise funds for protesters whose accounts had been blocked by the government. This event heightened government concerns and prompted exploration into regulating the cryptocurrency space.
Government Actions and the Binance Situation
In 2021, the Central Bank of Nigeria issued a directive prohibiting banks from facilitating crypto transactions, citing concerns over their use in fraudulent activities like money laundering and terrorism financing. However, this did not deter widespread adoption.
Many users shifted to peer-to-peer (P2P) trading, enabling direct buying and selling of cryptocurrencies without relying on traditional banking channels. Statistics from Breet indicated that over $1.5 billion worth of trades were recorded in a single quarter as of 2021. By 2022, approximately 35% of Nigerian youth, with over half under the age of 30, were identified as crypto investors.
Tensions escalated in 2024 when the Nigerian government targeted major exchanges, including Binance and OKX, accusing them of engaging in criminal activities without adequate oversight. Binance, in particular, faced accusations of tax evasion in Nigeria, including failure to pay value-added tax and company income tax, neglecting to file tax returns, and facilitating customers' tax evasion through its platform. Two Binance executives were detained in connection with these allegations.
Despite these crackdowns, cryptocurrency remains deeply embedded in Nigeria's economy. With persistent high inflation and a declining naira, digital currency continues to be perceived as a vital financial tool. For many young Nigerians, it represents a complex landscape of both opportunity and risk.