From the severe clampdown on crypto companies in 2024 to awarding the first crypto exchange licences the same year, 2024 was a regulation roller coaster. Given that there still isn't a clear regulation for blockchain, 2025 might not be any different.
However, there are steps blockchain companies can take to protect themselves in the blockchain space where regulations are not clear.
In a webinar themed Navigating Regulation as a Blockchain Company in Nigeria hosted by Techpoint Africa, Chioma Onyekelu, a blockchain forensics and compliance specialist, pointed out that the cost of being non-compliant outweighs the cost of compliance.
Giving a regulator's perspective to the discussions, Azeeza Hassan-Jibril, Head of Non-Interest Capital Market Products at the Nigerian Securities Exchange Commission, said that the priority of regulators is to ensure "strict regulation that ensures market stability, integrity, and confidence."
While the Securities and Exchange Commission (SEC) has been proactive in providing regulations that provide stability, integrity, and confidence, many businesses are still not clear on how to operate in Nigeria's blockchain space.
However, here are best practices by experts that can protect businesses in an unclear regulatory space.
Build with compliance in mind
According to Onyekelu, many blockchain businesses, especially those that deal with crypto, invest in what improves their bottom line rather than what ensures compliance.
"They would always say, 'Compliance is expensive; let's see how to make money first,' but one thing I always say is build with compliance in mind." She said one way to build with regulation in mind is to seek expert guidance.
Building with compliance in mind is what Zone, a Nigerian blockchain payments company, has also done. It is one of the few blockchain companies in Nigeria that has figured out regulations and even works closely with regulators. Ifunanya Anamelechi, the company's VP of Legal and Compliance, also shared some insights into how the company has been able to stay compliant
Anamelechi said, "We approach compliance as a cornerstone of our operations." This means Zone embeds compliance as an integral function of the solution they have created.
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Have a dedicated compliance team
Having a dedicated compliance team can help blockchain startups stay on top of regulation as it changes. While the regulation on blockchain is not completely clear, there are agencies a company's compliance team has to interface with regularly.
For example, Onyekelu shared that the Nigerian Financial Intelligence Unit (NFIU) would request a company's compliance specialist, who will periodically file money laundering reports.
"So you are supposed to be filing suspicious activities, reports, and even if you don't have, you're supposed to report that as well. You'll inform them that you have done business for a month and did not notice suspicious activity," Onyekelu noted.
A compliance team is also important for KYC, due diligence, and transaction monitoring — operations that are important to regulators.
Actively engage regulators
Frequent collaboration with regulators is one of the ways Zone stays compliant. According to Anamelechi, Zone frequently engages regulators such as the Central Bank of Nigeria (CBN), the Financial Reporting Council, and the SEC.
"For every time we look to deploy a product, we always have discussions and official correspondence with the CBN."
She added that actively engaging regulators helps Zone understand regulatory priorities and frameworks.
Pay attention to regulatory changes
Although regulation is always said to be playing catch-up to innovation, regulations can sometimes change at a pace even innovative companies may not be able to catch up with if they are not paying attention.
Using Zone as an example, Anamelechi recounted how the CBN mandated all PoS transactions to be routed through a payment terminal service aggregator (PTSA). As a payment facilitator on the blockchain, this means that Zone had to start routing payments through a PTSA.
A PTSA confirms a PoS's registration details and makes sure that it is fit to carry out transactions. This regulatory change was instated following the rise in cases of PoS fraud.
Compliance is beyond what regulators need you to do
According to Olaleye Oladimeji, a corporate commercial lawyer for blockchain companies and a technology advisor, staying compliant goes beyond what regulators require of a startup. It is also making sure that customers and investors are safe and confident in the product.
A company's desire to be compliant could also translate to its desire to keep customers safe, as most of the regulatory requirements are geared toward user safety.
Olaleye recommends that startups should involve legal professionals at the early stages of their business.
Whether it is a crypto-centric company or one that uses blockchain for other applications, compliance and regulation could play an integral part in its success in 2025.
