THE Securities and Exchange Commission (SEC) said the growing threat of digital assets fraud poses a significant challenge to market integrity and undermines investor confidence amid concern over Nigerians’ loss of fortunes to Ponzi schemes.

The SEC Director General, Emomotimi Agama, said this at an event in Abuja on Thursday, July 10, to mark the African Union Anti-Corruption Day.

“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,” Agama said.

He cited that the Investment and Securities Act (ISA) 2025 introduced key provisions to regulate virtual assets (cryptocurrencies, digital tokens, and other blockchain-based assets) in Nigeria.

He maintained that all Virtual Asset Service Providers (VASPs) (exchanges, custodians, brokers) must obtain SEC approval and meet capital, governance, and cybersecurity standards.

Urging all the platforms to warn investors about volatility, fraud, and regulatory risks, he warned that there would be stiff penalties for market manipulation, insider trading, and Ponzi schemes.

“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.

“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.

Following the recent scam on a digital investment platform, Crypto Bridge Exchange (CBEX), where Nigerians were said to have lost about N1.3 trillion, the SEC has been blamed for its inefficiency in making the necessary campaigns to enlighten and enforce regulations against Ponzi scheme operators.

At its plenary on Wednesday, July 9, the Nigerian Senate, upon launching a probe into the CBEX scam, declared a state of emergency on the matter.

The Red Chamber blamed the rise of Ponzi-style investment schemes on regulatory failures and weak financial oversight, warning that the ripple effects—including rising suicide rates and growing public mistrust—now threaten Nigeria’s social and economic stability.

It expressed worries that the N1.3 trillion lost to CBEX alone was not an isolated case but part of a disturbing pattern dating back to MMM in 2016 and MBA Forex in 2020.

The Senate stressed that Nigerians are being robbed repeatedly, urging the regulatory bodies to wake up, as the citizens trust them to act and not to sleep.

At the event on Thursday, the Chairman of the Economic and Financial Crimes Commission (EFCC), Ola Olukoyede, described virtual asset fraud as a fast-evolving threat to national economic security.

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