The Securities and Exchange Commission (SEC) in Nigeria has introduced stricter regulations to address the role of celebrities and social media influencers in promoting cryptocurrency platforms and assets. These new guidelines aim to curb the rise in fraudulent schemes that have left many citizens counting their losses after trusting high-profile endorsements.
In recent years, several crypto scams have been linked to platforms heavily promoted by popular figures with substantial social media followings. Victims often invest blindly, relying on the perceived credibility of these celebrities, only to lose their hard-earned money. In response, SEC has revised its guidelines, now mandating full disclosure of sponsorships and partnerships when promoting digital asset products or services.
The updated regulations impose severe penalties on those who fail to comply. According to the directive, individuals who receive compensation for such promotions must inform their followers of the arrangement. Failure to do so will attract a fine of no less than 10 million naira, imprisonment for up to three years, or both. “Finfluencers who receive compensation to promote digital asset products of services shall disclose this arrangement to their followers. Failure to do so will result in a penalty of not less than 10million, imprisonment for up to three years, or both,” stated the SEC directive.
Beyond transparency, influencers are also required to verify the authenticity of the cryptocurrency platforms they endorse. The SEC mandates that only platforms licensed and approved by the commission can be promoted. “Finfluencers shall before engaging in any promotional activities verify that both the VASP, products and services they intend to promote are licensed or approved by the Commission,” the guidelines further stipulated.
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This move is seen as a proactive step towards protecting citizens from fraudulent investment schemes. Many Nigerians have expressed frustration at being lured into scams due to misplaced trust in celebrities and influencers. By holding these public figures accountable, the SEC aims to restore trust in the financial ecosystem and encourage more responsible use of social media influence.
The commission’s decision highlights the increasing responsibility placed on influencers to act ethically and ensure due diligence before promoting financial products. With these stricter measures, the SEC hopes to reduce the prevalence of crypto-related scams and promote greater awareness among investors.