The Securities and Exchange Commission (SEC) has announced a partnership with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to trace and freeze illicit digital wallets linked to money laundering, cryptocurrency scams, and other financial crimes.

The SEC Director-General, Dr. Emomotimi Agama, disclosed this in Abuja during the 2025 edition of the SEC Journalists’ Academy themed “The ISA 2025 and the Future of Nigeria’s Capital Market: Innovation, Protection, and Growth.”

Agama, represented by the Head of External Relations Department, Mrs. Efe Ebelo, said the collaboration aims to enhance enforcement and investor protection in the digital asset space.

“To strengthen enforcement, the SEC is working closely with the Central Bank of Nigeria and the Economic and Financial Crimes Commission to freeze illicit digital wallets and recover criminal proceeds. Our goal is to ensure that innovation serves progress, not predation,” he said.

He noted that Nigeria ranks among the world’s top adopters of digital assets, with over one-third of its population involved in crypto-related activities—driven by youth innovation, mobile connectivity, and the pursuit of financial inclusion.

However, he warned that the rapid expansion of the digital finance space has also created room for fraudsters operating fake wallets, phishing scams, and Ponzi platforms that have defrauded thousands of Nigerians.

“Without strong regulation, innovation can quickly become vulnerability,” Agama said, stressing that regulation “is about building trust and ensuring that innovation strengthens, not undermines, the economy.”

He explained that the SEC’s 2022 Rules on Digital Assets established a comprehensive framework for Virtual Asset Service Providers (VASPs), focused on licensing, compliance, and transparency, in line with global anti-money laundering and counter-terrorism financing standards.

Agama further disclosed that the SEC is deploying blockchain analytics and artificial intelligence tools to trace suspicious transactions, detect fraud, and enhance cybersecurity across the digital finance ecosystem.

At the same event, the Head of FinTech and Innovation Department at the SEC, Abdulrasheed Dan-Abu, revealed that Nigerians have lost over N174 billion to more than 440 Ponzi schemes in recent years.

He attributed the losses to greed and the “get-rich-quick” mindset, warning that both operators and investors in unregistered investment schemes risk prosecution under the Investment and Securities Act (ISA) 2025.

Dan-Abu cited sections of the Act that criminalize offering unregistered securities or soliciting public funds without SEC approval, with offenders facing fines of up to 50% of the value of the illegal securities or imprisonment.

Agama reiterated the Commission’s resolve to balance innovation with investor protection, saying: “If regulators clamp down too hard, innovation migrates offshore; if they regulate too softly, risks multiply. Our task is to find the right balance.”

He affirmed that the SEC remains committed to building a transparent, ethical, and secure digital finance ecosystem, emphasizing that “the future of finance is digital — but its foundation must remain trust and integrity.” (Vanguard)