A proposed bill in Nigeria that seeks to impose hefty fines and up to 10 years in prison for Ponzi scheme operators has been welcomed by crypto industry players. They believe it could help improve the sector’s reputation and protect investors.
Investments and Securities Bill (ISB) 2024
Nigeria’s Securities and Exchange Commission (SEC) introduced the Investments and Securities Bill (ISB) 2024, which proposes fines of up to $12,000 (NGN 20 million) and lengthy prison terms for individuals convicted of running Ponzi schemes.
The SEC describes the bill as a step toward fostering transparency, enhancing investor confidence, and modernizing Nigeria’s financial markets. The bill, first presented under former President Muhammadu Buhari, aims to make the country’s securities market more competitive on a global scale.
While the Central Bank of Nigeria (CBN) and the Finance Ministry have raised concerns about specific sections of the bill, Senator Osita Izunaso, chairman of the Senate Committee on Capital Market, praised its potential to strengthen Nigeria’s capital market competitiveness.
Positive Reception from Crypto Industry Leaders
Key figures in Nigeria’s crypto industry have expressed strong support for the proposed legislation.
- Nathaniel Luz, CEO of Flincap and a prominent crypto advocate, hailed the bill as a crucial tool for weeding out fraudulent actors in the sector. “It’s one way to clear out bad actors from the industry so we can have a vibrant finance and investment ecosystem,” Luz remarked.
- Ophi Rume, another industry leader and regulation advocate, emphasized the potential of the bill to deter criminals. “The law would make scammers think twice before trying to exploit unsuspecting investors under the guise of crypto,” Rume said.
Both experts agree that the legislation could help hold accountable those who have tarnished the industry’s reputation by scamming users, further disassociating legitimate cryptocurrency from Ponzi schemes.
Addressing Nigeria’s Crypto Challenges
Nigeria is often regarded as one of the largest crypto markets in the world, but its reputation has been marred by rampant scams and fraudulent investment schemes. High-profile incidents, including endorsements of scam tokens by local celebrities, have exacerbated the problem.
The lack of stringent legal consequences has allowed these scams to flourish, with some fraudsters using the term “crypto” to disguise Ponzi schemes. Supporters of the ISB 2024 argue that the new penalties would serve as a deterrent and begin to change public perceptions of cryptocurrency in the country.
