SEC warns against unregulated digital assets, ponzi schemes

Barbara Bako, Abuja.

The Securities and Exchange Commission (SEC) has raised concerns over the growing risks associated with unregulated digital assets and Ponzi schemes, revealing that Nigerians have lost about ₦300.2 billion to fraudulent investment operations in recent years.

Speaking at the 2025 Journalists Academy organised by the Commission in Abuja on Thursday, the Director-General of the SEC, Dr. Emomotimi Agama, represented by Efe Ebelo, Head of External Relations Department, said the Commission remains committed to building a transparent and trustworthy financial ecosystem where innovation does not undermine investor protection.

“The future of finance is digital, but its foundation must remain ethical, transparent, and trustworthy. Virtual assets hold immense potential to expand inclusion and attract investment, but innovation must never outpace integrity,” Agama said.

He explained that digital assets are reshaping financial markets globally, adding that Nigeria must continue to strengthen its regulatory framework to ensure investor confidence.

“Regulation is not about restriction; it is about building trust and ensuring that innovation serves progress, not predation. That is why the SEC remains firm in balancing innovation with investor protection,” he said.

Agama noted that Nigeria is among the top adopters of digital assets in the world, a development that reflects the creativity of its youth and the country’s growing mobile connectivity.

However, he warned that the same progress has also attracted exploitation through scams and fraudulent schemes.

He said, “We have seen scams, phishing attacks, fake wallet applications, and ransomware schemes targeting unsuspecting citizens. Without robust regulation, innovation can quickly become vulnerability.”

On the issue of fraudulent investment schemes, the Head of Fintech and Innovation Department, AbdulRasheed Dan-Abu, disclosed that Nigerians lost an estimated N300.2 billion to Ponzi and illegal investment operations over the past few years.

According to him, investigations into major collapsed schemes such as MMM Nigeria, Nospecto Oil and Gas, MBA Forex and Capital Investment Ltd, Chinmark Group, Ovaioza Farm Produce Storage Business, and Famzhi Interbiz Ltd revealed the devastating impact of these fraudulent operations on households and small investors.

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Dan-Abu said, “The losses, drawn from investigations into some of the country’s most notorious Ponzi and illegal investment schemes, reveal the devastating financial and social impact of these operations on households and small investors. The SEC’s estimates cover several collapsed schemes that had promised extraordinarily high and unsustainable returns.”

He explained that MMM Nigeria accounted for about N18 billion, Nospecto Oil and Gas for N45 billion, and MBA Forex for N213 billion, while the other schemes collectively cost investors over N24 billion.

The Commission noted that these figures represent only a fraction of total losses, as many unregistered operators remain unreported, especially those targeting rural communities through online promotions.

The SEC said it has strengthened its enforcement and surveillance systems, combining investor education, inter-agency collaboration, and technological tools to detect and deter illegal activities.

The Commission is partnering with the Economic and Financial Crimes Commission (EFCC), the Nigerian Financial Intelligence Unit (NFIU), and the Central Bank of Nigeria (CBN) to identify and freeze accounts linked to unregistered operators.

The SEC added that it has also obtained court orders to shut down illegal entities, commenced prosecution of their promoters, and issued investor alerts to sensitize the public against fraudulent investment solicitations.

Dr. Agama reaffirmed the Commission’s commitment to fostering a safe and globally competitive digital asset ecosystem.

“At the Securities and Exchange Commission, we remain steadfast in advancing a forward-looking, principles-based regulatory framework that balances innovation with investor protection. Because in this new frontier of finance, trust is the ultimate currency and our highest duty is to preserve it,” he said.