The Nigerian Securities and Exchange Commission (SEC) has introduced stricter regulations targeting influencers who promote crypto-related products without transparency.
Under the updated framework, influencers must ensure that their crypto clients are licensed by the SEC before endorsing any product or service.
Additionally, all promotional content must be clearly labeled as sponsored. Failure to comply will result in severe penalties, including a fine of at least 10 million Naira (approximately $7,000), imprisonment for up to three years, or both.
Influencers should also use simple language in their promotions. The SEC warns against using technical jargon, ambiguous terms, or exaggerated promises such as “double your income now” or “secure your future.”
The SEC continued that promotional materials should avoid claims that could mislead or confuse potential investors. In addition, all advertisements must receive the prior approval of the Commission before publication.
The Commission explained that this move responds to growing concerns about financial influencers promoting unauthorized investments in digital assets. The regulations cover all communication platforms, including social media, television, radio and USSD channels.
The SEC stated that it will actively monitor online promotions and prosecute violators who violate these guidelines.
It is striking that the move by the Nigerian SEC is in line with global trends. For example, the United Kingdom’s Financial Conduct Authority (FCA) introduced similar measures in 2023, requiring crypto promotions to meet regulatory standards. Similarly, France requires influencers to complete certifications in responsible financial advertising before promoting crypto products.
Overhaul of crypto regulation
In addition to regulations on influencers, the SEC has tightened supervision of Virtual Asset Service Providers (VASPs) operating in Nigeria.
These companies must now register with the SEC and adhere to strict governance, financial and reporting standards. They must also submit regular trading data, compliance reports and audited financial statements.
The SEC also prohibits issuing or promoting cryptocurrencies that enhance anonymity.
These updated regulations will come into effect in June 2025, signaling a significant shift towards greater transparency and investor protection in the country’s crypto ecosystem.