TMT 2025

NIGERIA Trends and Developments Contributed by: Tiwalola Osazuwa, Peretimi Akinmodun, Lazarus Uwa Kalu and Mubaraq Popoola, ǼLEX

The lack of clear regulatory guidance created challenges for industry players, including access to banking services, legal recognition and inves - tor confidence. It also drove many cryptocur - rency businesses underground or out of Nigeria entirely, despite the country’s position as one of the largest cryptocurrency markets in Africa. Accordingly, the introduction of the ARIP Frame - work was a welcome development as it signalled a new era of regulatory clarity for the digital asset and cryptocurrency ecosystem in Nigeria. Release of the Exposure of Amendments to the Rules on Digital Assets Issuance, Offering Platform, Exchange and Custody As a corollary to the ARIP and to provide further regulatory clarity, the SEC subsequently issued the Exposure of Amendments to the Digital Assets Rules in 2024, which will come into effect on 30 June 2025. The amendments to the Digi - tal Assets Rules cover advertisement, market - ing and promotion, including third-party/social media promotions and mandate disclosure of paid promotions. Furthermore, the amendments create a new digital assets intermediary (DAI) category to cover persons that are not DAOPs, DAXs or DACs but are facilitating virtual assets transactions. Similarly, the CBN reversed its prohibition on banks facilitating cryptocurrency transactions, through the issuance of the Guidelines on Opera - tions of Bank Accounts for Virtual Assets Service Providers (the “VASP Guidelines”), which per - mit financial institutions to open bank accounts for cryptocurrency businesses, provided the requirements set out in the VASP Guidelines are fulfilled, including obtaining a relevant licence or registration from the SEC. The SEC’s ARIP Framework and the Exposure of Amendments to the Digital Assets Rules mark a

new chapter for Nigeria’s cryptocurrency indus - try, addressing years of regulatory uncertainty and setting the stage for sustainable growth. In conjunction with the CBN’s revised stance on cryptocurrency transactions through the VASP Guidelines, there is potential to unlock growth and position Nigeria as a leading hub for digital asset innovation in Africa. Financial Technology Growing impact of fraud on Nigerian fintech ecosystem and countermeasures The rise of Nigeria’s fintech industry has been remarkable, with the sector driving financial inclusion and providing innovative solutions for payments, lending, remittance, banking and investments. However, as the industry grows, it has become increasingly susceptible to use for illegal activities such as money laundering and vulnerable to fraud, including cyber-attacks, identity theft, phishing, etc, thereby threatening the stability of the sector. These activities have a multifaceted impact on fintech companies in Nigeria, including financial losses, erosion of trust, regulatory scrutiny and reputational damage. These challenges under - score the urgent need for fintech companies to bolster their anti-money laundering and fraud prevention mechanisms and for regulators to ensure effective enforcement of existing laws. Indeed, regulators have ramped up enforce - ment of existing regulations such as the CBN Customer Due Diligence Regulations 2023, which require physical verification of the resi - dential addresses of customers. The CBN also restricted customer onboarding for several non- compliant fintech companies in 2024. In addi - tion, regulators have been carrying out surprise inspections of fintech offices and imposing fines for violation of regulations.

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