In a decisive move to safeguard Nigeria’s financial system from digital fraud and illicit transactions, the Securities and Exchange Commission (SEC) has announced a partnership with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to trace, freeze, and recover proceeds from illegal digital wallets.
The SEC Director-General, Dr. Emomotimi Agama, made the announcement in Abuja during the 2025 edition of the SEC Journalists’ Academy, themed ‘The Investment and Securities Act (ISA) 2025 and the Future of Nigeria’s Capital Market: Innovation, Protection, and Growth.’
Represented by the Head of External Relations, Mrs. Efe Ebelo, Dr. Agama said the collaboration is designed to strengthen enforcement mechanisms, curb financial crimes, and improve investor protection in the fast-evolving digital asset space.
“To strengthen enforcement, the SEC is working closely with the CBN and EFCC to freeze illicit digital wallets and recover criminal proceeds. Our goal is to ensure that innovation serves progress, not predation,” he said.
Balancing Innovation and Regulation
Nigeria ranks among the world’s top adopters of digital assets, with more than a third of its population participating in cryptocurrency-related activities. This growth, driven by youth innovation and the pursuit of financial inclusion, has also made the sector a target for cybercriminals and Ponzi operators.
Dr. Agama cautioned that without robust oversight, the same innovation driving financial inclusion could expose millions to fraud.
“Without strong regulation, innovation can quickly become vulnerability,” he warned. “Effective oversight is key to ensuring that innovation strengthens, not undermines, the economy.”
He noted that the SEC’s 2022 Rules on Digital Assets established a regulatory framework for Virtual Asset Service Providers (VASPs), focusing on licensing, compliance, and transparency in alignment with global anti-money laundering (AML) and counter-terrorism financing (CTF) standards.
To enhance surveillance, the commission is deploying blockchain analytics and artificial intelligence tools to trace suspicious transactions, detect scams, and improve cybersecurity across Nigeria’s digital finance landscape.
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Tackling Ponzi Schemes and Investor Fraud
At the event, the Head of FinTech and Innovation Department at the SEC, Mr. Abdulrasheed Dan-Abu, revealed that Nigerians have collectively lost over N174 billion to more than 440 Ponzi schemes in recent years.
He blamed this on greed and the persistent “get-rich-quick” mentality, warning that under the new ISA 2025, both operators and participants in unregistered schemes risk prosecution.
“Offering unregistered securities or soliciting public funds without SEC approval is now a criminal offense,” he said, explaining that offenders face fines of up to 50 percent of the illegal transaction value or imprisonment.
Dan-Abu stressed that public awareness remains a crucial line of defense. “Investors must learn to ask the right questions before committing their money. If it sounds too good to be true, it probably is.”
Protecting Trust in a Digital Future
Dr. Agama reaffirmed the SEC’s commitment to maintaining a careful balance between innovation and investor protection.
“If regulators clamp down too hard, innovation migrates offshore; if they regulate too softly, risks multiply. Our task is to find the right balance,” he said.
He concluded that while the future of finance is digital, its foundation must remain rooted in trust, transparency, and integrity.
“The SEC remains committed to building a transparent, ethical, and secure digital finance ecosystem that protects investors and strengthens Nigeria’s capital market,” he said.
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