NIGERIA Law and Practice Contributed by: Omoruyi Edoigiawerie, Adebomi Adekeye and Habeeb Eyinade, EandC Legal
Recognition of foreign VASPs The SEC may recognise offshore authorisation only if the home jurisdiction is an IOSCO or WASRA member with reciprocal arrangements. However, this is discre- tionary and rarely exempts the firm from establishing a local compliance presence. The ARIP gateway New entrants often utilise the Accelerated Regulatory Incubation Program (ARIP) for provisional approval, which serves as a supervised on-ramp to full licens- ing. Marketing and Advertising Standards Nigeria’s marketing regime is significantly more pre- scriptive than traditional financial promotions. The SEC and the Advertising Regulatory Council of Nigeria (ARCON) mandate that all paid promotions, especially by financial influencers, be explicitly dis- closed. Misleading advertisements or undisclosed endorsements carry severe penalties, including fines of at least NGN10 million and potential imprisonment. All marketing materials must strictly align with the SEC-filed White Paper. Disclosures must include investment limits, cooling-off periods, and standard- ised risk warnings. Unlike the UK’s self-certified approach, Nigerian rules often require that promotional templates for public offerings be submitted to the SEC during the regis- tration process. Exemptions and Reverse Solicitation Permitted exemptions Specific exclusions apply to pure-play technology providers (eg, node operators, hardware wallet manu- facturers) and information portals that aggregate data without facilitating trades or holding custody. Reverse solicitation Nigeria does not formally recognise a reverse solicita- tion safe harbour. While a Nigerian resident may tech- nically seek an offshore platform independently, the SEC takes a dim view of firms relying on this to bypass registration. If any element of the service is localised
(eg, accepting Nigerian KYC documents or cards), the SEC typically deems it active solicitation. 4.2 White Labelling Under the ISA 2025 and the SEC Rules on Digital Assets, Nigeria enforces a strict direct-licensing man- date. External firms cannot utilise white-label solu- tions to bypass registration by leveraging the licence of an existing entity. The Direct Licensing Mandate The SEC treats every entity targeting Nigerian resi- dents as a primary market participant. There is no statutory recognition for licence sharing or umbrella arrangements. Each VASP must independently sat- isfy: • corporate subsidiarity – mandatory incorporation with the Corporate Affairs Commission (CAC); • capital adequacy – evidence of the required mini- mum paid-up capital; and • sponsored individuals – direct registration of its own principal officers as sponsored individuals. Regulatory Risks White-labelling without independent registration is classified as unauthorised activity. The SEC treats the underlying operator as an illegal entity, exposing both the white-label provider and the local licence holder to severe sanctions, including licence revocation, immediate “Post-No-Debit” banking restrictions, and criminal prosecution under the ISA 2025. The legal status of DeFi in Nigeria is defined by a supervisory exclusion model. While not explicitly pro- hibited, DeFi exists outside the standardised regula- tory perimeter established by the ISA 2025. Permissibility of DeFi DeFi is not formally regulated under the ISA 2025 or the 2025 SEC Rules on Digital Assets. The Nigerian framework is built on a central operator model, which requires a legal entity (VASP) to be accountable for compliance. 5. Decentralised Finance 5.1 Ability to Use DeFi
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