The Need for Balanced Regulation in Nigeria’s Cryptocurrency Sector
The House of Representatives has raised concerns about the misclassification of young Nigerians involved in cryptocurrency and blockchain activities as fraudsters. They emphasized the importance of distinguishing between innovation and criminal behavior, urging security agencies to adopt a more nuanced approach.
This position was highlighted during a high-level public hearing organized by the Ad-Hoc Committee on the Economic, Regulatory and Security Implications of Cryptocurrency Adoption and Point-of-Sale (PoS) Operations. The event, chaired by Olufemi Bamisile, took place at the National Assembly Complex in Abuja. It brought together key stakeholders from both the public and private sectors, including cryptocurrency exchanges, blockchain associations, fintech innovators, and regulators.
During the session, Mr. Bamisile outlined the committee’s goal: to create a regulatory framework that supports innovation while maintaining security and financial integrity. He criticized what he described as “misplaced aggression” by some security agencies, particularly the Economic and Financial Crimes Commission (EFCC) and the Nigeria Financial Intelligence Unit (NFIU), in their handling of cryptocurrency-related investigations.
“Not every young Nigerian with a laptop and a crypto wallet is a fraudster,” he said, stressing the need to separate innovation from crime. The committee members, including Kama Nkemkama and Akinosi Gboyega, echoed these sentiments, emphasizing the importance of aligning law enforcement with the realities of financial technology.
Key Participants and Their Contributions
The hearing featured participation from leading digital asset operators and experts, such as Buchi Okoro from Quidax, Moyo Shodipo from Busha, and Olaniyi Atose from KoinKoin. Other notable attendees included Oluwasegun Kosemani from Botmecash, Ayotunde Alabi from Luno Nigeria, Igwe Goodnews from Downtown, and Emeka Ezike from Bitbarter.
Representatives from blockchain associations were also present, including Obinna Iwuno from the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), Ihenyen from VASPA, Faith Okaformbah from the Blockchain Experts Association of Nigeria (BEAN), and Uyoyo Edema from CNGN (Convexity). Participants described the meeting as historic, noting it was the first time the National Assembly had hosted a broad, credible conversation with verified operators on the future of digital assets.
Gender Inclusion in the Digital Economy
The session also addressed gender inclusion in the digital economy. Mawahin Adams, co-founder of Nigeria Women Bitcoiners (NWB), urged the government to integrate women’s voices into the development of national cryptocurrency policy. She proposed a National Digital Asset Literacy and Inclusion Programme, suggesting that 1-2 per cent of annual crypto regulatory fees be reserved for digital inclusion projects.
Adams also recommended incorporating digital-asset education into NYSC orientation programmes and secondary school curricula. This initiative aims to ensure that women are not left behind in the rapidly evolving digital landscape.
Balancing Regulation and Innovation
A significant part of the discussion focused on balancing regulation and innovation. Lawmakers engaged in a detailed exchange with Buchi Okoro, co-founder of Quidax, regarding the company’s operations under the Securities and Exchange Commission (SEC) regulatory sandbox and its partnerships with gaming platforms like Bet9ja.
Lawmakers sought clarity on whether such integrations might circumvent the SEC’s Accelerated Regulatory Incubation Programme (ARIP), which governs virtual asset service providers. Abdulrasheed Mohammed, head of Fintech Innovations at SEC, explained that the Commission maintains oversight of all sandbox activities to prevent abuse.
However, Mr. Bamisile urged the SEC to balance firmness with flexibility, warning against bureaucratic inertia that could stifle innovation. He emphasized the need for stronger supervision and taxation mechanisms through agencies like the Federal Inland Revenue Service (FIRS) to ensure the sector contributes meaningfully to President Bola Tinubu’s ₦1 trillion digital economy vision.
Warnings Against Overregulation
Many participants warned that heavy-handed regulation or premature taxation could drive crypto activities underground. They urged the newly renamed Nigeria Revenue Service (NRS) to adopt a phased taxation policy, using incentives to encourage compliance rather than punishment.
Blockchain expert Oye Benson advocated for the development of locally built regulatory technologies (RegTech) that can help government agencies monitor, audit, and report transactions effectively. Such tools would strengthen Nigeria’s digital sovereignty, create jobs, attract foreign investment, and build capacity within the local tech ecosystem.
The Path Forward
The hearing comes just days after Nigeria’s removal from the Financial Action Task Force (FATF) grey list, a milestone that restored international confidence in its anti-money laundering framework. Despite this progress, Nigeria remains one of the largest cryptocurrency markets in the world, yet operates without a unified law regulating digital assets.
The Bamisile Committee is expected to submit recommendations to guide the National Assembly in developing Nigeria’s first comprehensive legal and regulatory framework for cryptocurrency and digital finance. This effort marks a critical step toward fostering a secure, inclusive, and innovative digital economy.