Digital entrepreneurs and online investors are raising concerns following a major legal reform that could reshape Nigeria’s digital finance and investment landscape.
President Bola Tinubu recently signed the Investments and Securities Act 2025 (ISA 2025) into law—a sweeping regulation aimed at tightening control over online trading platforms and protecting investors from financial misconduct.
One of the most significant reforms under this new law is the outright ban of unregistered online foreign exchange (forex) trading platforms and digital asset exchanges in Nigeria. Any entity operating such platforms without prior registration with the Securities and Exchange Commission (SEC) is now considered illegal and subject to penalties.
SEC Cracks Down on Illegal Platforms
In a public statement, the SEC confirmed its new enforcement powers:
“It is an offence in Nigeria for any entity that is not registered by the Commission to carry out the business of online foreign exchange trading or provide related services.”
The commission directed all online trading firms to report to the Head of Department, DRM at SEC for guidance on becoming compliant.
Under Section 3(3)(b) of the ISA 2025, the SEC is now legally empowered to register, regulate, and sanction digital securities exchanges—including crypto platforms, virtual asset exchanges, and online forex services.
Tighter Oversight, Greater Protection
Dr. Emomotimi Agama, Director General of the SEC, hailed the new Act as a milestone in regulating Nigeria’s capital market to meet global standards.
“The law strengthens our legal authority to monitor and take action against fraudulent practices, particularly in digital finance segments previously outside regulatory oversight,” Dr. Agama explained.
“While we encourage innovation, it must occur within a secure and regulated environment that protects investors and upholds the integrity of the financial market.”
Investor Responsibility: Know Before You Trade
With this development, traders and investors are urged to verify the regulatory status of any platform before committing their funds. Only platforms registered with the SEC are considered legal and trustworthy under the new framework.
Tougher Stance on Ponzi Schemes
In a related move, the ISA 2025 also introduces harsher penalties for operators of Ponzi schemes, including up to 10 years in prison. The SEC confirmed its readiness to begin enforcement against illegal schemes and scams across the country.
This new law, while causing concern among digital entrepreneurs, marks a significant step toward building a safer and more transparent investment climate in Nigeria.
