For years, Nigeria has been one of the biggest crypto markets in Africa, with millions of people trading, holding, and mining digital assets. But if you're thinking about setting up a crypto mining rig in Nigeria today, you need to know one thing: it's not illegal-but it's far from simple. The rules have changed dramatically since 2025, and what used to be a wild west of mining operations is now a tightly regulated space with serious consequences for non-compliance.

Is Crypto Mining Legal in Nigeria?

No law in Nigeria says you can't mine Bitcoin or Ethereum. There’s no ban on running ASICs or GPUs in your garage, basement, or warehouse. But legality isn’t just about what’s written-it’s about what’s enforced. And right now, the Nigerian government has made it extremely difficult to mine crypto without jumping through a series of legal hoops.

The real turning point came in October 2025 with the Investments and Securities Act (ISA 2025) a comprehensive law that classifies all virtual assets-including mined cryptocurrencies-as securities under the jurisdiction of the Securities and Exchange Commission (SEC). This means if your mining operation connects to a trading platform, offers mining-as-a-service, or even sells the coins you mine directly to users, you’re now a Virtual Asset Service Provider (VASP) a business that interacts with digital assets on behalf of users and must be licensed by the SEC.

What the SEC Requires to Operate Legally

If you want to mine crypto legally in Nigeria, you’re not just buying hardware. You’re starting a regulated financial business. The SEC now demands that all VASPs meet strict criteria:

• Proof of Nigerian corporate registration (CAC certificate)
• A minimum paid-up capital of ₦500 million ($334,000)
• A fidelity bond covering potential losses
• A physical office and local management team in Nigeria
• Full KYC and AML compliance systems

These aren’t suggestions-they’re non-negotiable. Only two exchanges, Quidax and Busha, received provisional licenses in late 2024. Dozens more are still waiting. If you’re mining at scale and plan to sell your coins, you’ll need to apply for this license. Otherwise, you’re operating outside the law.

The Banking Ban That Still Haunts Miners

Even though the Central Bank of Nigeria (CBN) lifted its 2021 directive banning banks from serving crypto businesses in late 2023, the damage lingers. Most banks still refuse to open accounts for crypto-related businesses. Why? Because they’re scared of fines, regulatory backlash, or being flagged by the Economic and Financial Crimes Commission (EFCC).

This means miners can’t use traditional banking channels to pay for electricity, import hardware, or receive payments. Instead, they rely on peer-to-peer (P2P) platforms like Paxful, LocalBitcoins, and local Telegram groups. Between July 2024 and June 2025, Nigerians moved over $92 billion in crypto via P2P trades-more than any other African country. But this workaround isn’t safe. It’s risky. And it leaves miners vulnerable to scams, chargebacks, and sudden account freezes.

Taxation: The New Nightmare

The Nigeria Tax Administration Act (NTAA) 2025, which takes effect in 2026, is the most aggressive move yet. It doesn’t just tax income-it targets non-compliance with brutal penalties.

Here’s what happens if you don’t register:

• ₦10 million ($6,693) fine in the first month
• An extra ₦1 million ($669) for every month you stay unregistered
• SEC can shut down your operation entirely
• EFCC can seize equipment and freeze assets

That’s not a warning. That’s a trap. Many small-scale miners who thought they were just "hobbyists" are now being audited. If you’re mining more than a few coins per month and converting them to Naira, you’re already generating taxable income. The government now has access to telecom data, blockchain analytics, and exchange records. You can’t hide.

Infrastructure: The Hidden Cost

Even if you clear every legal hurdle, you still have to deal with Nigeria’s power grid. Electricity costs in Nigeria average ₦80-₦150 per kWh, depending on location. In comparison, miners in Canada pay around $0.05 per kWh. That’s a 15x difference.

Most mining rigs require constant power. A single Antminer S21 running 24/7 uses about 3.2 kW. That’s over 230 kWh per month. At ₦120/kWh, that’s ₦27,600 ($184) just in electricity. Multiply that by 10 rigs? You’re spending over ₦276,000 ($1,840) a month on power alone.

And that’s if the power stays on. Rolling blackouts are still common. Many miners use diesel generators-but diesel prices have surged since 2024. A generator running 12 hours a day can cost over ₦40,000 ($267) per month in fuel. Suddenly, your mining profit margin disappears.

Who’s Still Mining in Nigeria?

Two types of miners are still active:

1. Small-scale hobbyists-mining one or two rigs, using solar or low-cost power, and holding coins long-term. They rarely cash out, so they fly under the radar.
2. Licensed commercial operators-those who’ve applied for SEC licenses, invested in solar farms, and partnered with regulated exchanges. These are rare, expensive, and mostly funded by venture capital.

Large mining farms with hundreds of rigs? Almost gone. Many have relocated to Kazakhstan, Canada, or the U.S., where energy is cheaper and regulations clearer. Nigeria’s crypto mining scene is shrinking-not because people stopped caring, but because the cost of compliance is higher than the reward.

What Happens If You Get Caught?

The EFCC has already raided several unlicensed mining operations in Lagos and Abuja. Equipment was seized. Bank accounts frozen. Owners questioned. In one case, a man with 18 ASICs was charged with operating an unlicensed financial business and fined ₦15 million. He had no license, no tax registration, and no bank account. He lost everything.

The government isn’t trying to kill crypto. They’re trying to control it. If you’re compliant, you can operate. If you’re not? You’re a target.

The Future: Compliance or Exit

Nigeria’s approach is clear: we’re not banning crypto-we’re regulating it like a bank. The National Blockchain Policy 2023 encourages blockchain adoption in government, agriculture, and logistics. But mining? That’s a financial activity. And financial activities need licenses.

The path forward is narrow but possible:

• Register your business with the CAC
• Apply for SEC licensing as a VASP
• Install solar panels or secure long-term power contracts
• Use only licensed exchanges for trading
• File taxes monthly and keep full records

If you can do all that, you’re not just a miner-you’re a regulated financial entity. And that’s worth the effort.

If you can’t? You’re gambling. And in Nigeria’s new crypto environment, the house always wins.