The Nigerian Securities and Exchange Commission (SEC) has revised its regulations concerning cryptocurrency, imposing new requirements on virtual asset service providers (VASPs) and social media influencers involved in crypto-related promotions. This update signifies a strategic move to enhance oversight and ensure compliance within the burgeoning crypto sector in Nigeria.
Under the updated Digital Asset Rules, VASPs must now secure prior approval from the SEC before engaging third-party service providers to promote their crypto products. This requirement aims to ensure that all promotional activities align with the SEC’s stringent marketing regulations. Additionally, these rules mandate that VASPs verify third-party compliance to prevent misleading or unauthorized advertising practices.
The revised rules also specifically address the growing influence of “Finfluencers” — financial influencers on social media who promote cryptocurrency products and services. To mitigate risks associated with influencer marketing, Finfluencers must obtain a “no-objection authorization” from the SEC before posting digital asset advertisements. They are also required to verify that the entities they promote are properly licensed by the SEC and must disclose any compensation received for their promotional efforts.
Penalties for Non-Compliance
The SEC has set severe penalties for violations of the new marketing rules. Non-compliant Finfluencers could face fines starting from 10 million Nigerian Naira (approximately $6,400) or up to three years in prison. The regulatory body intends to actively monitor crypto advertisements to ensure adherence to these guidelines, with enforcement actions ready to be deployed against those who breach the regulations.
These updates come as part of a broader initiative by the Nigerian SEC to control the crypto market more effectively and protect investors from potential fraud. The rules are set to be implemented by June 30, 2025, providing VASPs and influencers sufficient time to adjust to the new regulatory landscape.
Currently, Nigeria has only two regulated crypto exchanges. Quidax Technologies received the country’s first provisional operating license on August 29, while Busha Digital was also approved to function within the regulatory framework. These licenses permit the platforms to operate as registered exchanges, ensuring a controlled environment for crypto transactions.
On September 9, the SEC announced plans to commence enforcement actions against entities engaged in unregulated crypto transactions. This directive underscores the SEC’s commitment to cracking down on unauthorized crypto services that may pose risks to Nigerian investors.
| Date | Event |
|---|---|
| Aug 29 | Quidax Technologies receives provisional operating license |
| Sept 9 | SEC announces upcoming enforcement against unregulated VASPs |
| June 30, 2025 | Implementation date for new crypto marketing rules |
Author’s Opinion
The Nigerian SEC’s revamped regulations represent a proactive approach to managing the complexities of a rapidly evolving cryptocurrency market. By tightening the rules on crypto marketing and holding influencers accountable, the SEC aims to create a safer investment landscape and curb the proliferation of fraudulent schemes. These measures reflect a global trend towards stricter crypto regulation, acknowledging the significant impact of social media on investment decisions. As Nigeria continues to develop its digital asset framework, the balance between innovation and investor protection will be pivotal. This evolving regulatory environment will likely serve as a model for other nations grappling with similar challenges in the crypto space.
