The Director General of Nigeria’s Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has raised an alarm over the increasing threat of digital asset fraud to the integrity of the country’s capital market. Speaking during the African Union Anti-Corruption Day in Abuja, Dr. Agama emphasized that fraudulent activities surrounding virtual assets are not only eroding investor confidence but also hindering sustainable economic development and undermining market trust.
He highlighted how digital innovation, while beneficial, has also opened the floodgates for complex scams involving cryptocurrencies and blockchain-based assets. These scams exploit regulatory gaps and target uninformed investors, making it imperative for regulators to act swiftly. Agama reaffirmed SEC’s commitment to intensifying investor education, updating regulatory frameworks, and collaborating internationally to tackle corruption and financial crimes related to virtual assets.
In response to these challenges, the newly enacted Investment and Securities Act (ISA) 2025 positions the SEC as Nigeria’s lead regulator for digital assets considered securities. Under the law, all Virtual Asset Service Providers (VASPs), such as exchanges, brokers, and custodians, are now required to register with the Commission, meet minimum governance standards, and ensure robust cybersecurity compliance.
The Act mandates clear disclosures on digital asset platforms about associated risks like volatility and fraud. It also outlines strict penalties for offenses such as market manipulation, Ponzi schemes, and insider trading. Dr. Agama emphasized that the regulatory approach aims to strike a balance between innovation, financial stability, and investor protection in the emerging digital asset ecosystem.
Echoing the SEC’s concerns, the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, described virtual asset fraud as an evolving threat to Nigeria’s economic security. He warned that it could soon surpass traditional crimes like money laundering in scale and impact, urging all stakeholders – from government to civil society – to work together to build transparent and accountable financial systems.
Source: Vanguard