Regulator flags massive growth in digital asset transactions, ramps up rules to curb risks and protect investors…
Nigeria’s fast-growing digital finance space is drawing sharper regulatory attention after authorities revealed the sheer scale of activity in the sector.
The Director-General of the Securities and Exchange Commission, Emomotimi Agama, disclosed that cryptocurrency and other virtual asset transactions in Nigeria have reached an estimated $96 billion, underscoring the urgency for stronger oversight.
Speaking at a Citizens and Stakeholders Engagement Session organised by the Federal Ministry of Finance in Abuja, Agama said the volume of transactions makes regulation no longer optional.
“As we speak today, the digital asset space in Nigeria is within the range of $96 billion in transaction flow, and that is important for us to manage,” he stated.
Why Regulators Are Stepping In
With billions flowing through largely decentralised platforms, the SEC is now reinforcing its grip on the sector through the Investment and Securities Act 2025, which expands its authority to cover digital assets and emerging financial technologies.
The law not only cements the SEC’s role as the apex regulator of Nigeria’s capital market but also introduces safeguards aimed at:
- Monitoring systemic risks
- Aligning Nigeria with global regulatory standards
- Bringing virtual asset operators under formal supervision
The move reflects growing concern that unchecked expansion in the crypto space could expose investors and the broader financial system to significant risks.
Capital Market Growth Gains Momentum
Beyond crypto, Agama painted a picture of a capital market on the rise.
In 2024 alone, the SEC approved approximately ₦3.68 trillion in new market issuances across equities and fixed income instruments, helping businesses and institutions raise fresh capital.
The market has also played a critical role in strengthening Nigeria’s banking sector. Over 31 banks tapped the capital market during the recent recapitalisation drive, raising funds to meet new regulatory requirements.
As a result, total market capitalisation has surged from about ₦55 trillion in 2024 to ₦127 trillion, reflecting growing investor participation and confidence.
Even more telling is the market’s expanding role in the broader economy. The ratio of market capitalisation to GDP has climbed from 13 percent to around 33 percent, signaling deeper financial market penetration.
Crackdown on Fraud and Ponzi Schemes
With growth has come risk and the SEC is stepping up enforcement.
Agama revealed that the Commission has issued over 90 advisory warnings to Nigerians about suspicious investment schemes, many of which promise unrealistic returns.
Working alongside the Nigeria Police Force, the regulator has intensified efforts to investigate and prosecute fraudulent operators, particularly Ponzi schemes that continue to lure unsuspecting investors.
He cautioned Nigerians to verify all investment opportunities with the SEC before committing funds, noting that many victims fall prey through unregistered platforms.
Funding Infrastructure Through the Market
The capital market is also proving to be a key funding channel for development.
State governments have increasingly turned to bond issuances to finance infrastructure projects such as markets, roads, and stadiums. These investments are backed by mechanisms like the Irrevocable Standing Payment Order, which ensures repayment directly from federal allocations.
To further support subnational funding, the SEC has established an Office of Municipal Fund Development, aimed at helping states and local governments access long-term financing.
Additionally, the Commission backed the creation of a Mortgage Refinancing and Infrastructure Fund to address Nigeria’s housing deficit, enabling more Nigerians to access mortgages at lower interest rates.
The Bigger Picture
Looking ahead, regulators are aiming even higher. Agama said the goal is to deepen Nigeria’s capital market to levels seen in other emerging economies, such as India, where market capitalisation relative to GDP is significantly higher.
But challenges remain.
Officials from the Federal Ministry of Finance highlighted ongoing pressures on government finances, including:
- Lower-than-expected oil production
- Volatile global oil prices
- Rising debt servicing costs
- Increased wage obligations
To address this, the government has introduced weekly cash management reviews and is working toward consolidating multiple budget cycles into a single, more efficient system from 2026.
What This Means
Nigeria’s financial landscape is evolving rapidly from a booming crypto market to a deepening capital market ecosystem.
But with growth comes responsibility.
For regulators, the challenge is striking the right balance between innovation and oversight. For investors, the message is clear: opportunity is expanding but so are the risks.
