SEC Nigeria Demands Greater Transparency in Crypto to Tackle Rising Fraud

Nigeria’s Securities and Exchange Commission (SEC) is stepping up its efforts to address the growing wave of fraud in the cryptocurrency space. In a clear signal of its intentions, the regulatory body is turning to blockchain intelligence and data-driven tools to tighten its grip on digital asset transactions, with transparency at the core of its strategy.

Speaking during a recent webinar hosted jointly by the SEC and Chainalysis, a global blockchain analytics firm, the Director-General of the SEC, Dr. Emomotimi Agama, laid out a strong case for why crypto transactions must be fully transparent. The theme of the webinar, “Combating Scams with Blockchain Intelligence,” reflects the urgent need to deal with rising fraud in digital finance. Participants included regulators, analysts, tech providers, and key players from the blockchain and crypto industries.

Agama’s message was clear: the time to act is now. The threat of crypto-related scams is not only real but escalating. As the digital asset market continues to expand, so do the schemes of bad actors who exploit the system to steal from unsuspecting investors.

“If we sit back and do nothing, what will the future look like?” Agama asked, clearly concerned about the consequences of inaction. He stressed that disjointed efforts and a lack of collaboration between stakeholders only serve to enable more complex and dangerous fraud schemes.

According to Agama, the SEC is moving towards a model of oversight that is deeply rooted in data intelligence. Blockchain technology offers the possibility to trace every transaction, and the commission wants to take full advantage of that. The idea is to use the permanent, transparent nature of blockchain to analyze fund movements, track wallet clusters, and identify connections between transactions that may indicate illicit activity.

The technology behind blockchain is such that no transaction disappears into thin air. Every transfer of Bitcoin, Ethereum, or any other crypto token is permanently recorded. That provides regulators like the SEC with an incredible tool—if they can harness it effectively. Agama explained that the commission’s goal is to build its capacity for in-depth analysis of blockchain data so that it can detect fraud early, identify patterns, and respond faster.

But the types of fraud facing Nigeria’s crypto space are evolving rapidly. Agama mentioned fake decentralized finance (DeFi) protocols and phony NFT projects that lure in investors with the promise of huge returns. These schemes are often dressed up to look legitimate but are designed to steal funds from investors who may not fully understand the risks.

Even social media platforms have become tools for fraudsters. According to Agama, scammers now run highly coordinated campaigns across Twitter, Telegram, and WhatsApp to spread misinformation, hype fraudulent projects, and manipulate investor sentiment. There’s also a disturbing rise in so-called romance scams, where fraudsters use dating apps to build trust before convincing victims to invest in fake crypto opportunities.

The scope of the problem is enormous, and data from Chainalysis paints a stark picture. In their 2025 Crypto Crime Report, they revealed that addresses linked to illicit activity received a staggering $178 billion over the past five years. The year 2022 saw the highest volume at $54.3 billion, followed by $46.1 billion in 2023 and $40.9 billion in 2024. Although there has been a slight decline year-over-year, the numbers remain alarmingly high.

Interestingly, stablecoins are now being used in 63 percent of these illicit transactions. While Bitcoin still dominates when it comes to ransomware and darknet market activity, criminals are shifting to stablecoins for other types of fraud, likely because of their more stable prices and quicker transaction times.

One of the most troubling findings from the Chainalysis report was a 21 percent increase in stolen funds in 2024, amounting to $2.2 billion. DeFi platforms, which are often less regulated than centralized exchanges, were the main targets. However, even centralized platforms came under heavy attack, especially during the middle of the year. Private key compromises alone accounted for nearly 44 percent of stolen crypto, with North Korean hackers reportedly responsible for over $1.3 billion in stolen funds.

To combat this growing threat, Nigeria recently introduced a significant piece of legislation: the Investment and Securities Act (ISA) 2025. This new law, which came into effect in April, provides long-awaited clarity for the digital asset industry. For years, crypto activities in Nigeria existed in a regulatory gray area. Now, with ISA 2025, the country has a legal framework that sets rules, defines responsibilities, and gives the SEC more authority to act.

Agama believes the ISA marks a turning point for Nigeria. He described it as a groundbreaking law that ensures the country can take a united approach to digital asset regulation. But he was also quick to point out that while regulation is essential, it should not stifle innovation. There is a delicate balance between protecting investors and allowing new ideas to flourish, and the SEC is aiming to strike that balance.

In closing, Agama called on all parties—regulators, industry stakeholders, and technology providers—to work together. Combating crypto fraud cannot be the responsibility of one group alone. It requires a collective effort and a shared commitment to transparency and security. Blockchain’s greatest strength is its traceability, and by using it effectively, regulators can protect investors and build trust in the system.

Nigeria is rapidly emerging as a key player in Africa’s digital finance space. The SEC’s latest push for transparency and intelligence-led oversight shows a strong determination to ensure that growth in the crypto sector does not come at the cost of investor safety. If stakeholders can come together and put the right tools in place, the future of crypto in Nigeria could be both secure and prosperous.