Nigerian SEC’s New Crypto Regulations Set to Transform Industry Landscape
The Nigerian Securities and Exchange Commission (SEC) has announced a groundbreaking amendment to its regulations governing the cryptocurrency sector. This new legislation mandates that all cryptocurrency platforms and Virtual Assets Service Providers (VASPs) obtain a license from the SEC before they can engage in promotional activities across social media, television, or print media. The regulations are slated to take effect on June 30, 2025.
As part of the new requirements, crypto influencers must also disclose any financial compensation they receive for promoting a digital asset or service. Noncompliance with this stipulation could result in a hefty fine of up to 10 million naira or even a prison sentence of up to three years.
Rume Ophi, a prominent crypto analyst and educator in Nigeria, shared his insights regarding the proposed regulations with Nairametrics. He acknowledged that while the policy is not without flaws, it represents a pivotal step forward in enhancing the integrity of the cryptocurrency market.
Ophi remarked, “Before now, the industry had seen numerous instances of bad actors exploiting the lack of regulation, leading individuals to significant financial losses. Introducing a policy that requires promotions to come from licensed entities will significantly reduce the number of questionable projects being advertised.” He emphasized that every technological field faces challenges from bad actors, and the crypto industry is no exception. As such, establishing regulatory structures is essential, and this law is intended to facilitate that.
The SEC’s initiative has been largely welcomed by key stakeholders within Nigeria’s cryptocurrency community as a necessary move to purify the landscape by eliminating exploitative practices by unscrupulous operators.
Key Details of the New SEC Regulation:
- The section addressing influencers in the official SEC documentation is titled “Specific Requirements for Third-Party and Social Media Promotions.”
- It comprises three distinct subcategories, each tackling specific issues related to crypto promotion.
- The first subcategory, named “Third Party Engagements,” necessitates that any VASP looking to engage a third party for promotional activities must first seek approval from the SEC.
- The second subcategory, focused on “Social Media Influencers,” requires that any VASP hiring influencers for marketing purposes must secure a “No Objection Authorization” from the SEC prior to proceeding.
- Furthermore, influencers are urged to confirm that the platforms they are promoting have received proper licensing from the SEC before accepting promotional opportunities.
- Lastly, the subcategory on “Disclosure of Paid Promotions” mandates that influencers must openly inform their audience whenever they are compensated for endorsing a token or platform.
In additional context, the Nigerian SEC Chairman recently expressed gratitude to President Bola Ahmed Tinubu for his pro-crypto stance, which led to his appointment in the SEC leadership role. Notably, two Nigerian-owned cryptocurrency exchanges, Busha and Quidax, were the first to secure licensing from the SEC, marking the dawn of a new regulatory phase in Nigeria’s cryptocurrency domain.
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