The Securities and Exchange Commission (SEC) has raised concerns over the growing risk of digital asset fraud, describing it as a significant threat to market integrity and investor confidence in Nigeria and across Africa.
Speaking in Abuja at an event to mark African Union Anti-Corruption Day, the Director General of the SEC, Dr. Emomotimi Agama, warned that as digital innovation transforms financial markets, it is also giving rise to increasingly sophisticated scams and virtual asset fraud.
The event was themed “Understanding Virtual Assets and Investment Fraud.”
Dr. Agama noted that corruption remains a major barrier to Africa’s economic progress, social development, and attractiveness to investors.
He added that the misuse of digital assets, including cryptocurrencies and other blockchain-based products, is diverting resources that could otherwise support sustainable development.
“As digital innovation transforms financial systems, we face new challenges, particularly the rise of virtual asset fraud and sophisticated investment scams targeting unsuspecting investors,” Dr. Agama said. “These threats undermine trust, weaken market integrity, and ultimately harm economic growth.”
To address these challenges, Dr. Agama explained that the SEC is stepping up efforts in three major areas: educating investors to help them identify and avoid fraudulent schemes; updating regulatory frameworks to respond to the evolving risks in digital investments; and working closely with both domestic and international partners to curb corruption and illicit financial flows.
Dr. Agama also pointed to the new Investment and Securities Act (ISA) 2025 as a significant step forward. The Act gives the SEC a clearer mandate to regulate virtual assets that qualify as securities or investment products. Under this law, Virtual Asset Service Providers (VASPs), including exchanges, brokers, and custodians, are required to register with the SEC and meet strict requirements covering governance, capital adequacy, and cybersecurity.
He explained that platforms offering digital assets must clearly warn investors about the risks of volatility, potential fraud, and changing regulatory environments. The new law also sets out stiff penalties for offences such as insider trading, Ponzi schemes, and market manipulation.
“The ISA 2025 provides a comprehensive legal framework for virtual asset regulation, balancing innovation with investor protection and financial stability,” Dr. Agama said.
“The SEC will continue to issue guidelines to ensure compliance while supporting a secure and transparent digital asset ecosystem.”
Dr. Agama called on stakeholders—including governments, businesses, civil society, and ordinary citizens—to work together to promote transparency, accountability, and ethical practices in the financial sector. “Together, we can build resilient markets that drive Africa’s prosperity,” he said.
Also speaking at the event, the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, described virtual asset fraud as a rapidly growing risk to national economic security. He warned that this form of crime could soon surpass traditional money laundering in scale and impact on the continent.
“Another rising criminal engagement that has a potential to outpace, even money laundering, on the continent is virtual assets and investment scam,” Mr. Olukoyede said.
