President Bola Ahmed Tinubu has signed the Investment and Securities Act (ISA) 2024 into law to regulate digital assets and improve investor protection. The new law replaces the Investments and Securities Act of 2007 and strengthens the legal framework for capital market activities.
The Securities and Exchange Commission (SEC) called the Act a “transformative step” that enhances market transparency and aligns Nigeria’s financial regulations with global standards. One of its most significant reforms is the formal recognition of virtual assets and investment contracts as securities.
This move places Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the SEC’s supervision, ensuring stricter investor protection and accountability in the digital asset space.
With this law, digital asset operators must follow strict regulatory guidelines, reducing risks related to fraud, manipulation, and market abuse. The Act also introduces new rules for financial market infrastructure, such as clearinghouses and trade depositories, which play a crucial role in ensuring safe and efficient transactions.
The Investment and Securities Act (ISA) 2024 will regulate crypto operations in Nigeria, which has become one of the top five active crypto trading locations.
To protect investors, the Act strengthens enforcement against Ponzi schemes and fraudulent investment activities. It imposes stricter penalties, including long prison terms, for individuals promoting illegal financial schemes.
The law also introduces measures to ensure market stability, exempting transactions involving clearing houses from insolvency laws and giving the SEC more authority to manage systemic risks in the capital market.
SEC Director-General, Dr. Emomotimi Agama, praised the law, stating that it strengthens Nigeria’s position as a competitive destination for investment. “The ISA 2024 empowers the SEC to foster innovation, protect investors, and promote a more inclusive capital market,” he said.
He also lauded the National Assembly for working together across party lines and considering input from various stakeholders while shaping the law. The SEC also recognized the finance ministers for their guidance in aligning the law with the Tinubu administration’s economic goals.
In 2020, the SEC first introduced its digital asset rules, defining digital assets as securities unless proven otherwise, with the onus of proof resting on the digital asset issuer. The SEC also brought crowdfunding involving crypto under its purview.
Three months ago, the Securities and Exchange Commission expanded the rules guiding digital assets in the country. The expanded rules addressed areas such as cross-chain transfer services, virtual asset investment advice, and financial portfolio management.
