The Nigerian Securities and Exchange Commission (SEC) has announced new laws that will regulate the practices of crypto influencers in the country. This new regulation represents an update to the previous rules governing the industry. Per the new development, all crypto platforms must obtain a license from the body before they can carry out any promotional activities. This includes promotion across TV, radio, social media, and other print media.
As part of the requirements, crypto influencers are mandated to disclose any financial benefits they enjoy for promoting a platform or asset. The statement revealed that non-compliance could land perpetrators a 10 million naira fine or up to three years in jail. The new regulation will take effect on June 30, 2025. The new SEC laws have been seen as a needed purge for the crypto industry in Nigeria, removing exploitative practices.
Nigeria SEC law on crypto influencers explained
According to the document titled “Specific Requirements for Third-Party and Social Media Promotions,” any crypto company that wants to engage the services of influencers must first forward a written letter to the commission. The SEC also said the influencers must adhere strictly to the rules set out, noting that the platform must ensure that the rules are followed.
The commission mentioned that the influencers involved must first provide a detailed copy of the agreement letter before it is endorsed. They must also ensure that the products and platforms that they intend to influence have obtained all the needed license from the needed licenses from the commission. Influencers are also mandated to reveal to their followers if they were paid for their services or kit before carrying out the said service.
Finally, the SEC said it will continue to monitor promotional activities in the sector to ensure that they are in line with the Commission’s regulations. In the case that any company or influencer is caught in violation of its rules, the SEC said it will sanction the affected parties which will include financial penalties and other sanctions. The commission also promised to carry out a periodic review of its rules to ensure they are in line with global trends, promoting innovation in the industry.
Industry experts discuss the Nigeria SEC’s new rule
Prominent crypto analysts have discussed the new rule, with most of them giving their honest reviews about its flaws. One such is crypto educator Rume Ophi. According to Ophi, the new laws will ensure integrity in the industry, noting it as a step forward.
“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,” Ophi said.
According to Ophi, there is always a case of most technology industries being threatened by bad actors, and the crypto industry is not an exception. As such, there is a need to establish the needed laws to check the activities of the people promoting entities and products in the sector.
In addition, the SEC Chairman has expressed his gratitude to President Bola Ahmed Tinubu for his pro-crypto stance and support for the industry. He mentioned that his appointment as the SEC Chair was made possible through the influence of the president. According to the SEC, two crypto firms, Busha and Quidax are the first firms to secure a license of operation in the country, highlighting a new crypto atmosphere in the country.
Meanwhile, the government’s perception of crypto remains relatively unknown. While there is a ban on the assets, the country has ranked as one with the highest adoption rate in the continent. However, most of these transactions happen via peer-to-peer, with most banks unwilling to provide their services to crypto platforms citing the government’s orders.
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