THE JURISDICTIONAL QUAGMIRE OF CRYPTO ASSETS IN NIGERIA: REASSESSING LEX SITUS IN THE DIGITAL AGE

Abstract

The rise of crypto assets has in sharply disrupted traditional legal principles, such as the conflictof-laws doctrine of lex situs which states that property is to be adjudicated in the place where it is located. This tangle of jurisdictional difficulties in Nigeria, the world largest crypto market, requires significant jurisdiction. Crypto assets are digital entry on distributed ledgers not recurrent in geography; they are decentralized digital entries on the distributed ledgers, without the fixed geographical place name commonly favored in traditional territorial interpretation. Plus, there is an issue of regulatory conflict in Nigeria as the Central Bank of Nigeria (CBN) bans banks from purchasing crypto assets while the Securities and Exchange Commission (SEC) purports to regulate digital assets as securities. This internal conflict makes it difficult for Nigerian courts to determine the legal system and jurisdiction for settling cross-border crypto disputes. In this paper, while the lex situs principle is not conceptually sound, it is a necessary concept for implementation in the digital age, where it needs a profound rewrite, starting with the lex fori imperative. If Nigerian courts want to determine what a situation is, they first have to recognize crypto assets as legal property in order to determine a situs. This paper establishes a three-tiered Nigerian doctrine of digital lex situs, which stems from comparative jurisprudence drawn from the United Kingdom, Singapore and South Africa which favours control-based testing over physical location. Thus, crypto asset is an intangible property, assuming existing legislation such as the Evidence Act 2011 and SEC Rule 2022. Activating a control principle that anchors the situs in the place where the owner gains effective control, whether domicile of the private keyholder or exchange location. The practical approach matches with the common law tradition in Nigeria. The implementation will be to bolster the CBN-SEC contradiction by jointly codifying the code, to establish precise courts of justice to trace and freeze on-chain assets, and, at the regional level, to use regional agreements such as the AfCFTA Protocol on Digital Trade to implement transnational integration. The recommended approach is a hybrid approach that is legislative clarify, control-based jurisdictional anchoring, and institutional coherence. By solving its internal regulatory conflict and strengthening its judicial capacities, Nigeria can turn its current uncertainty into a leadership opportunity, making it the legal certainty that will enable it to fully participate in the global digital economy.