The Nigerian House of Representatives has raised fresh alarm over the growing number of crypto platforms operating without regulatory approval, warning that the trend threatens consumer protection, financial stability, and national security. Hon. Olufemi Bamisile, chairman of the ad-hoc committee investigating crypto-related risks, said many Point-of-Sale (POS) agents and online platforms now offer crypto services without any form of licensing or compliance oversight. According to him, this exposes users to fraud, money-laundering schemes, and irreversible financial losses.
At the centre of the scrutiny is the continued operation of firms that bypass the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN). These platforms aggressively target Nigerian users while offering trading, P2P exchange, and custodial services outside Nigeria’s regulatory perimeter. Lawmakers argue that this vacuum creates fertile ground for market abuse, data breaches, poor security practices, and unchecked capital flows, especially when operators collapse or disappear with customer funds.
They also highlighted the wider macroeconomic implications. Unregulated crypto activities, particularly P2P markets, distort Nigeria’s FX visibility and undermine the CBN’s ability to track cross-border transactions, detect illicit transfers, and maintain monetary discipline. For lawmakers, the risks extend beyond crypto speculation—they cut into Nigeria’s commitments to anti-money-laundering and counter-terror-financing frameworks.
Why Many Platforms Remain Unlicensed
Despite existing SEC rules that outline licensing requirements, capital thresholds, cybersecurity obligations, and operational safeguards, many “online-safe” platforms continue to sidestep regulation. Lawmakers believe part of the challenge is that some operators view compliance as too expensive or bureaucratic, while others simply believe they will evade enforcement.
Paul Okafor, President of the Association of Digital Payment and POS Operators of Nigeria (ADPPON), told the committee that fraudulent activity is rife among unlicensed agents, eroding trust and weakening the integrity of the payments ecosystem. He explained that many crypto-POS operators lack governance structures, adequate capital, and proper risk controls—conditions that inevitably expose users to systemic losses. Okafor urged regulators to balance innovation with firm oversight so that digital finance can grow without putting citizens in danger.
Operational Risks and Regulatory Blind Spots
A major concern for lawmakers is how unlicensed platforms store user data. Many rely on foreign servers, which limits regulatory access and complicates investigations. According to Bamisile, this makes it difficult to trace suspicious activity or respond effectively to potential breaches, undermining national AML and CTF efforts.
Lawmakers also warned about rapid scaling among informal operators. Many do not maintain separate customer funds, lack financial buffers, and operate with minimal security controls. When combined with a total absence of licensing, these deficiencies make them a direct threat to consumer safety and to Nigeria’s broader financial infrastructure.
Proposed Reforms: Bringing Order to the Market
To address the rising risks, the House is pushing for stronger coordination between the SEC, CBN, law enforcement agencies, and financial intelligence units. Lawmakers want mandatory registration for any POS agent or platform facilitating crypto transactions, alongside stricter KYC standards, routine audits, and real consequences for non-compliance.
Their position is clear: operators must either integrate into the formal regulatory framework or be forced out of the market. The goal is to restore trust in payment systems, protect consumers, and ensure Nigeria’s digital-asset activity does not continue operating in a grey zone.
The Push for a More Mature Crypto Market
Nigeria already has a regulatory foundation through the SEC’s Rules on Digital Assets, but weak enforcement has allowed many operators to function unchecked. Lawmakers want that gap closed through enhanced monitoring, better inter-agency cooperation, and stronger penalties for unlicensed operators.
For compliant businesses, this shift opens the door to greater credibility and user trust. For those avoiding regulation, the landscape is tightening. Nigeria is moving toward a more structured and accountable digital-asset environment, one where innovation is welcome, but only within an orderly and transparent system.
Nigeria’s Crypto Future
Nigeria’s crypto adoption remains one of the highest globally, but lawmakers argue that growth without structure is unsustainable. Their intervention reflects a broader truth: long-term market stability will depend on regulatory discipline, data transparency, and consumer protection.
The message from the House is unambiguous , Nigeria will embrace innovation, but not at the expense of financial integrity or user safety. For the crypto ecosystem to mature, compliance must evolve from an option into a fundamental requirement.
