The Nigerian Securities and Exchange Commission (SEC) has proposed a draft of the Investment and Securities Act, which includes stringent penalties for cryptocurrency fraud. According to PANews, the draft legislation suggests fines of up to $12,000 (20 million Naira) or a prison sentence of up to 10 years for convicted offenders. The proposal aims to deter criminal activities in the cryptocurrency sector, which has been marred by scams and Ponzi schemes.
Many in Nigeria’s cryptocurrency community believe this legislation is a crucial step in addressing fraudulent schemes that have tarnished the country’s reputation. Eliminating these bad actors, they argue, will bring more legitimacy to a sector historically plagued by deception. “This move is vital for the growth and trustworthiness of the industry,” said a community member who works in blockchain technology.
Despite being recognized as one of the world’s largest markets for cryptocurrency, Nigeria has earned a dubious reputation as a “scammer’s paradise.” Experts attribute this to a lack of effective legal frameworks to punish financial fraud. The absence of strong deterrents has allowed criminal activities and investment scams to thrive, often with Nigerian celebrities endorsing or launching fraudulent digital assets and tokens.
The SEC’s proposed penalties reflect a broader effort to cleanse the cryptocurrency sector and create a safer investment environment. By cracking down on offenders with hefty fines and long prison sentences, the Nigerian government hopes to restore investor confidence and reduce the prevalence of scams that have hindered the industry’s potential.
