Nigeria’s SEC Introduces New Crypto Rules to Regulate Influencers and Promote Compliance for Virtual Asset Service Providers

• The Nigerian SEC’s updated regulations aim to combat unregulated digital asset promotions and protect investors from misleading information.

• These new rules establish stricter guidelines for virtual asset service providers and influencers, ensuring compliance and accountability in the crypto space.

• According to the SEC, “the objective is to foster a safer investment environment” for Nigerians engaging with digital assets.

Nigeria’s SEC updates crypto marketing rules to enhance investor protection and regulate influencer promotions, effective June 30, 2025.

New Regulations Targeting Financial Influencers in Nigeria

The revised Digital Asset Rules introduced by the Nigerian Securities and Exchange Commission (SEC) reflect a proactive approach to regulating the digital asset market, particularly focusing on the growing influence of social media personalities, often termed “Finfluencers.” These guidelines require that all promotions of digital assets must undergo a review process, compelling these influencers to secure a “no-objection authorization” from the SEC before they can share cryptocurrency advertisements.

In addition, influencers are mandated to confirm the legitimacy of the companies they promote. This involves verifying whether these entities are appropriately licensed by the SEC to operate as VASPs. This shift aims to heighten transparency in the increasingly complex landscape of crypto marketing, which has seen a surge of promotions without regulatory oversight.

Legal Implications for Non-compliance

The SEC’s rigorous measures include significant penalties for non-compliance. Influencers failing to adhere to these new rules face fines starting from 10 million Nigerian naira (approximately $6,400) and, in severe cases, could even face imprisonment for up to five years. This stringent enforcement underscores the SEC’s commitment to curtailing reckless promotion of potentially fraudulent or unlicensed crypto products.

The SEC stated, “Our goal is to mitigate risks associated with financial influencers,” emphasizing their role in safeguarding investors from potential scams and misinformation circulating within social media platforms.

Stricter Oversight on Virtual Asset Service Providers

As part of its broader regulatory framework, the SEC is also keen on overseeing the operations of virtual asset service providers (VASPs) in Nigeria. Currently, only two exchanges are fully regulated, namely Quidax Technologies and Busha Digital, both of which have obtained provisional operating licenses from the SEC. These developments mark a significant milestone in legitimizing cryptocurrency trading in the country.

On September 9, the SEC announced its intentions to initiate enforcement actions against unregulated VASPs. Emomotimi Agama, the SEC’s director-general, emphasized that the agency would take firm action against businesses offering crypto services without the required permissions, thereby protecting Nigerian citizens from unscrupulous operations.

Investor Confidence through Regulation

These regulatory developments not only aim to provide a framework for responsible marketing practices in the crypto sector but also serve to enhance investor confidence. By ensuring that crypto promotions are legitimate and regulated, the SEC is fostering an environment where investors can engage with digital assets more securely.

Industry experts believe that such regulations could lead to an influx of institutional investments into the Nigerian crypto market, as enhanced confidence may attract more serious players willing to enter the already dynamic landscape.

Conclusion

In summary, Nigeria’s SEC has taken significant strides to regulate digital asset promotions and protect investors from potential abuses in the burgeoning crypto market. With the emphasis on compliance for both influencers and VASPs, these new regulations aim to create a more transparent and secure investment environment for all participants. As the enforcement date approaches, stakeholders within the crypto ecosystem will need to adapt quickly to these changes to ensure compliance and foster a safer market.