Regulation of Blockchain Financing in Nigeria: The Need for a Definitive Framework
Abstract
In the era of blockchain technology, Nigeria has emerged as a forerunner in its application, driven by a burgeoning population of young people and a vibrant fintech environment seeking alternatives to the unpredictability of conventional finance. Despite this momentum, the legal landscape for blockchain-based financing, which includes Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Decentralized Finance (DeFi), has historically been marked by regulatory resistance between the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). While the enactment of the Investments and Securities Act (ISA) 2025 marked a significant milestone by formally recognizing digital assets as securities and establishing a licensing regime for Virtual Asset Service Providers (VASPs), this paper argues that the current landscape remains a "fragmented patchwork" rather than a definitive framework. Through a doctrinal and comparative analysis of the ISA 2025, the SEC’s 2026 Revised Minimum Capital Requirements, and the Finance Act’s taxation provisions, this research identifies critical gaps in the existing regime. Specifically, it highlights the prohibitive nature of high capital thresholds (reaching ₦2 billion for certain exchanges), the lack of statutory clarity regarding the legal personality of Decentralized Autonomous Organizations (DAOs), and the absence of specific evidentiary rules for the enforcement of smart contracts in Nigerian courts. Furthermore, the study examines the "regulatory gridlock" caused by overlapping jurisdictions between the SEC, the Corporate Affairs Commission (CAC), and the Federal Inland Revenue Service (FIRS). The paper concludes that for Nigeria to transition from a consumer of blockchain technology to a hub for blockchain-led capital formation, it must move beyond piecemeal circulars and incubation programmes. It proposes a Definitive National Blockchain Financing Framework that harmonizes inter-agency roles, introduces a tiered licensing structure to support local start-ups, and provides a clear legal taxonomy for "utility" versus "security" tokens. Such a framework is essential to balance financial stability and investor protection with the imperative for technological innovation.