This New Law in Nigeria Seeks to Halt Fraudulent Crypto Project Ads by Influencers.
Nigerian Government Proposes New Law For Crypto Influencers, Defaulters to get 3 Years In Jail.
The Nigerian Securities and Exchange Commission (SEC) has introduced a proposed regulation targeting cryptocurrency influencers who promote fraudulent crypto projects.
Hence this new law requires that all cryptocurrency platforms and virtual assets providers(VAPS) must obtain a licence from SEC before engaging in any adverts be it on social media, Television or print.
Nigerian Law Regulation Activation Time
Crypto influencers must disclose any compensation they receive for promoting digital assets or services.
Non-compliance with this disclosure requirement could result in a fine of ₦10 million and imprisonment for up to three years.
Furthermore, Nigerian crypto stakeholders welcomed the new law as a step forward in regulating the industry, controlling abusers, and eliminating predatory practices.
According to the document titled “Specific Requirements for Third-Party and Social Media Promotions,” any crypto company that wants to engage the services of influencers must first forward a written letter to the commission.
The SEC also said the influencers must strictly adhere to the rules, and the platform must ensure compliance. The commission stated that influencers must first provide a detailed copy of the agreement letter for endorsement.
They must also ensure that the products and platforms that they intend to influence have obtained all the needed license from the commission. Influencers must also disclose all payments they receive for their services.
Finally, the SEC said it will continue to monitor promotional activities in the sector to ensure that they are in line with the Commission’s regulations. If any company or influencer violates its rules, the SEC will sanction them. This will include financial penalties and other sanctions, such as three years in jail.
Industry stakeholders have largely welcomed this initiative,two Crypto exchanges Busha and Quidax owned by Nigerians were the first to receive a license from the Nigerian SEC kickstarting a new phase of regulation in the Nigerian crypto space.
