The Nigerian Securities and Exchange Commission (SEC) recently announced stricter regulations aimed at influencers promoting crypto-related products without transparency. The new framework requires influencers to ensure that their crypto clients are licensed by the SEC before endorsing any products or services. Additionally, all promotional content must be clearly labeled as sponsored to avoid misleading potential investors.
Failure to comply with these rules will result in severe penalties, including a fine of at least 10 million Naira (approximately $7000), imprisonment of up to three years, or both. The SEC also mandates that influencers use simple language in their promotions, avoiding technical jargon, ambiguous terms, or exaggerated promises that could mislead or confuse consumers.
Furthermore, all advertisements must receive prior approval from the Commission before publication to ensure compliance with the regulations. The SEC emphasized that it will actively monitor online promotions and prosecute violators who fail to adhere to these directives.
This move by the Nigerian SEC aligns with global trends in crypto regulation. For example, the United Kingdom’s Financial Conduct Authority (FCA) implemented similar measures in 2023, requiring crypto promotions to meet legal standards. France also mandates that influencers complete certifications in responsible financial advertising before endorsing crypto products.
In addition to influencer regulations, the SEC has also tightened oversight on Virtual Asset Service Providers (VASPs) operating in Nigeria. These firms must now register with the SEC and adhere to strict governance, financial, and reporting standards. They are required to submit regular trading data, compliance reports, and audited financial statements to ensure transparency and investor protection.
The SEC has also prohibited the issuance or promotion of anonymity-enhanced cryptocurrencies. These updated regulations are set to take effect in June 2025, signaling a significant shift towards greater transparency and accountability in Nigeria’s crypto ecosystem. By implementing these measures, the SEC aims to protect investors and ensure the integrity of the crypto market in the country.