Nigerian SEC warns influencers of new 3 year jail term for promoting ‘unlicensed’ crypto

The Nigerian Securities and Exchange Commission (SEC) has rolled out stricter rules targeting influencers promoting crypto-related products without transparency.

Under the updated framework, influencers must ensure 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 attract severe penalties, including a fine of at least 10 million Naira (approximately $7000), imprisonment of up to three years, or both.

Influencers are also required to use simple language in their promotions. The SEC warns against using technical jargon, ambiguous terms, or exaggerated promises like “double your earnings now” or “secure your future.”

The SEC continued that promotional materials must avoid claims that could mislead or confuse potential investors. Furthermore, all advertisements must receive prior approval from the Commission before publication.

The Commission explained that this move addresses growing concerns about financial influencers promoting unauthorized digital asset investments. 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 breach these directives.

Notably, the Nigerian SEC’s move aligns with global trends. For instance, the United Kingdom’s Financial Conduct Authority (FCA) introduced similar measures in 2023, requiring crypto promotions to meet legal standards. Similarly, France requires influencers to complete certifications in responsible financial advertising before promoting crypto products.

Crypto regulation overhaul

In addition to influencer regulations, the SEC has tightened oversight on Virtual Asset Service Providers (VASPs) operating in Nigeria.

These firms must now register with the SEC and adhere to stringent 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 anonymity-enhanced cryptocurrencies.

These updated regulations will take effect in June 2025, signaling a significant shift toward greater transparency and investor protection in the country’s crypto ecosystem.