The Nigerian Securities and Exchange Commission under Emomotimi Agama has proposed a new law aimed at combating the issue of crypto influencers using their influence to promote dubious crypto projects.
The new law requires every crypto platform or Virtual Assets Service Provider (VASP) to be registered with a license from the Nigerian SEC before carrying out any promotion on social media, TV, or Print.
The law is set to take effect on June 30th, 2025.
Crypto influencers must also disclose to their community that they are paid to promote a digital asset or a service according to the new law. Failure to do this could attract a fine of N10 million naira and up to 3 years in jail.
The new SEC law was welcomed by top stakeholders in the Nigerian crypto space as a positive step in sanitizing the Nigerian crypto space and getting rid of predatory practices by bad actors.
Specific Requirements for Third-Party and Social Media Promotions
The official document from the Nigerian SEC contains the new law under one category with three subcategories.
- The law was titled “ Specific Requirements for Third-Party and Social Media Promotions” with three categories spelling out the various tenents of the new law.
- The first subcategory titled “Third Party Engagements” stipulated that every VASP intending to engage a third party for promotions must get subsequent approval from the Nigerian SEC.
- The VASP also needs to ensure that the third party adheres to the SEC rules on crypto promotion.
- The Second subcategory titled “Social media influencers “stipulates that any VASP engaging the services of an influencer to promote a platform or a token must obtain a “No objection authorization” from the commission before engagement.
Fin influencers should before accepting a gig make sure that the VASP or platform they are about to promote has obtained a license from the SEC.
The last subcategory titled “ Disclosure of paid promotions “ stipulates that Fin influencers should always disclose to their community whenever they are paid to promote a token or a platform.
Policy not perfect but a step in the right direction
Rume Ophi, leading crypto analyst and educator in Nigeria shared his thoughts on the new law with Nairametrics. Rume stated that the policy although not perfect is a step in the right direction.
“The Policy is not perfect, according to documents is going to take full force from June 2025. It makes a whole lot of sense to start right now because before now we have had a lot of bad actors and players in the industry who don’t want anything regulated so they can also promote projects that have led people to lose their money.
- It is a step in the right direction people can only promote projects that have licenses. This will shut the door for people who are experts in promoting terrible projects.
- Every technology has bad actors and the crypto industry is not immune to it. There needs to be some level of structure and that is what a law like this is meant to do. “Rume stated
- The Nigerian SEC Chairman recently hailed Nigerian President Bola Ahmed Tinubu for being pro-crypto by appointing him with the task of heading the Securities and Exchange Commission.
Two Crypto exchanges Busha and Quidax owned by Nigerians were the first to receive a license from the Nigerian SEC kickstarting a new phase of regulation in the Nigerian crypto space.