Nigeria’s Cryptocurrency Monitoring Initiative
The Nigerian government has embarked on a significant initiative to monitor cryptocurrency transactions by linking them to individuals’ identities as part of the newly enacted Nigeria Tax Administration Act (NTAA) of 2025. This legislation indicates Nigeria’s commitment to adhering to the Organization for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework, which is set to be implemented starting January 1, 2026. The framework facilitates the collection, analysis, and sharing of information regarding international digital asset transactions among participating countries.
Key Features of the NTAA
One of the key features of the NTAA is the integration of cryptocurrency transactions with the Tax Identification Number (TIN) and National Identification Number (NIN) of individuals. The TIN serves as a distinctive identifier allotted to Nigerian citizens and businesses by the Nigeria Revenue Service, aiding in the monitoring and enforcement of tax compliance. Conversely, the NIN links individuals to their biometric data stored in the National Identity Database, further strengthening the identification process.
Regulatory Requirements for Virtual Asset Service Providers
Under this new regulatory framework, Virtual Asset Service Providers (VASPs) must gather both TIN and NIN details of their users and submit these along with transaction records to tax authorities. This approach allows the government to trace crypto activities back to specific individuals without the reliance on costly blockchain surveillance technologies.
For their tax returns, VASPs are obligated to disclose detailed information about their services, including transaction dates, asset values, total sale amounts, and essential personal details of customers such as names, addresses, contact numbers, and tax IDs, as well as NINs where applicable. Additionally, tax authorities maintain the right to demand further information from exchanges without prior notice as part of their compliance monitoring.
Monitoring and Reporting Obligations
Moreover, crypto exchanges must actively monitor and report any high-value or suspicious transactions to the Nigerian Financial Intelligence Unit and relevant tax authorities. They are mandated to maintain comprehensive records of customer identities and transaction histories for a minimum of seven years. Non-compliance with these regulations could result in severe financial penalties, including a potential initial fine of ₦10 million (approximately $7,014) for the first month of default, followed by ₦1 million (around $702) for subsequent months, along with the risk of license suspension.
Impact on Nigeria’s Cryptocurrency Market
Between July 2024 and June 2025, Nigeria’s cryptocurrency market saw transactions totaling around $92.1 billion, marking it as one of the leading global hubs for digital assets. The Nigerian government aims to harness even a portion of this revenue through taxation to reduce its dependence on oil as a primary income source. This move is part of a broader strategy to combat tax evasion related to cryptocurrencies, regulate the sector more effectively, and enhance the country’s tax-to-GDP ratio in the years to come.
Additionally, last year’s legislation officially classified cryptocurrencies as securities, placing them under the regulatory purview of the Nigerian Securities and Exchange Commission, further cementing the country’s legal framework for digital assets.
