The Nigerian Securities and Exchange Commission (SEC) has announced a major crackdown on influencers promoting unlicensed crypto products.
Under new regulations, influencers who endorse cryptocurrencies without proper SEC licensing could face severe consequences.
Influencers now face a potential jail term of up to three years or a fine of at least 10 million Naira (about $7,000) for promoting unlicensed crypto services.
The move is part of Nigeria’s effort to increase oversight of the digital asset market, which has grown rapidly in recent years.
The SEC’s new framework requires influencers to ensure that any crypto company they promote is licensed by the commission.
The SEC also demands that all promotional content be clearly marked as sponsored.
“We want transparency,” said a spokesperson from the SEC. “No more hiding behind ambiguous language or false promises. Influencers must be accountable for what they promote.”
The Commission stressed that influencers must avoid using technical jargon or exaggerated claims such as “double your earnings now” or “secure your future.”
Such promises are not only misleading but could also put investors at risk, according to the SEC.
All promotional materials must now be approved by the SEC before being published. The Commission warned that failure to comply with these new rules could result in legal action.
The new rules apply to all forms of media, including social media platforms like Instagram and Twitter, as well as traditional media like television and radio.
The SEC’s action is part of a global trend of tougher crypto regulations. Similar moves have been made in other countries, including the United Kingdom and France.
Last year, the UK’s Financial Conduct Authority (FCA) introduced similar rules requiring crypto promotions to meet legal standards. France also made it mandatory for influencers to complete a certification process before promoting crypto products.
The SEC explained that the updated regulations aim to protect the public from the risks of investing in unregulated or deceptive crypto schemes.
“Too many people have been misled by influencers pushing products that are not licensed or safe,” the SEC said in a statement. “This must stop.”
The SEC has also taken action to increase oversight on Virtual Asset Service Providers (VASPs) in Nigeria.
Under the new rules, VASPs will be required to register with the SEC and meet stricter governance, financial, and reporting standards.
“These firms will need to submit regular trading data and compliance reports,” the SEC confirmed.
The Nigerian government has been working to improve transparency in the crypto sector, which has been criticized for its lack of regulation.
Part of the SEC’s new policy also includes a ban on anonymity-enhanced cryptocurrencies.
These digital assets, which allow transactions to be made without revealing the identities of users, are considered a potential risk for money laundering and illegal activities.
“Cryptocurrencies that protect the identity of users pose a threat to financial integrity,” said the SEC.
“The use of such currencies will no longer be allowed in Nigeria.”
The updated regulations will take effect in June 2025, giving crypto firms and influencers time to adjust to the new rules.
The SEC has stated that it will closely monitor online promotions and take action against any influencers or companies that violate the new guidelines.
The Nigerian government’s stricter stance on crypto comes amid growing concerns about the impact of digital currencies on the financial system.
The rise of cryptocurrency-related frauds and scams has led to increased calls for regulation from investors and financial experts alike.
With the new rules in place, the SEC aims to create a more secure environment for investors while tackling the risks associated with unlicensed crypto activities.
“We are committed to protecting Nigerian investors,” the SEC concluded. “These new rules are necessary to safeguard the future of the financial system.”
