Digital assets fraud a major threat to market integrity – SEC DG

Barbara Bako, Abuja

The Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has raised the alarm over the increasing incidence of fraud involving digital assets, stressing that such activities endanger the integrity of the financial market and shake investor confidence.…

Dr. Agama spoke in Abuja during an event held to commemorate the African Union Anti-Corruption Day themed “Understanding Virtual Assets and Investment Fraud,” the event focused on the rising risks associated with digital finance.

He pointed out that corruption remains a key barrier to Africa’s economic progress and social development, adding that it also hampers the continent’s appeal to global investors.

“Today, as digital innovation transforms financial systems, we face new challenges, particularly the rise of virtual asset fraud and sophisticated investment scams exploiting unsuspecting investors. These threats undermine market integrity, erode trust, and divert resources meant for sustainable development,” he said.

Dr. Agama emphasized the SEC’s ongoing efforts to curb these risks through multiple strategies.

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He said the Commission is committed to “strengthening investor education on recognizing and avoiding fraudulent schemes; enhancing regulatory frameworks to keep pace with evolving risks in virtual assets and digital investments; and fostering cross-border collaboration to combat corruption and illicit financial flows”.

The SEC DG highlighted that the newly enacted Investment and Securities Act (ISA) 2025 provides critical provisions for regulating digital assets, including cryptocurrencies and blockchain based products.

Under the new law, the Commission serves as the primary regulator for digital assets classified as securities or investment instruments.

According to him, all Virtual Asset Service Providers (VASPs) including exchanges, brokers, and custodians are required to obtain SEC authorization and comply with set standards for capital, governance, and cybersecurity.

He also stressed the importance of risk disclosures, noting that platforms must inform investors about the inherent risks of volatility, fraud, and regulation.

“There are stiff penalties for market manipulation, insider trading, and Ponzi schemes,” he warned.

“The ISA 2025 provides a comprehensive legal framework for virtual asset regulation, balancing innovation, investor protection, and financial stability. The SEC will continue to issue guidelines to ensure compliance while fostering a secure digital asset ecosystem,” he stated.

Dr. Agama called on stakeholders from across sectors to collaborate in promoting transparency and ethical conduct.

“We urge all stakeholders—governments, private sector players, civil society, and citizens—to join forces in promoting transparency, accountability, and ethical practices. Together, we can build resilient markets that drive Africa’s prosperity,” he added.

Also speaking at the event, the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, identified virtual asset fraud as an emerging threat to national financial security.

“Another rising criminal engagement that has a potential to outpace, even money laundering, on the continent is virtual assets and investment scam,” he said.