Osita Izunaso declares end to Ponzi scheme and capital market manipulation

The Chairman of the Senate Committee on Capital Market, Senator Osita Izunaso, has shed light on the severe consequences awaiting operators of Ponzi schemes under the new Investment and Securities Act 2025, which aims to rebuild trust in the capital market. The recent enactment of the Investment and Securities Act 2025, signed into law by President Bola Tinubu, represents a monumental overhaul of Nigeria’s investment and securities regulations.

This new law replaces the 2007 Investment and Securities Act (ISA) with a comprehensive legal framework designed to modernize and reset Nigeria’s investment and securities sector. Notably, one of the key highlights of the Act is the official recognition of digital assets and cryptocurrencies as securities, a first in Nigeria’s history. This recognition allows individuals and businesses to engage in legal trading of digital assets and cryptocurrencies under the supervision and regulation of the Securities and Exchange Commission (SEC).

By bringing Virtual Asset Service Providers (VASPs) and digital asset operators under the SEC’s oversight, the Act ensures regulatory supervision and protection for investors. This significant shift acknowledges the booming cryptocurrency market in Nigeria and seeks to regulate it effectively.

Additionally, the law aligns with the President’s vision of a $1 trillion economy by fortifying the money and capital markets. Regulating digital assets will not only boost investor confidence but also foster stability in the financial market. The goal is to provide a robust framework to support Nigeria’s economic growth towards the envisioned trillion-dollar economy.

In terms of combating Ponzi schemes and market manipulations, the Act introduces stringent penalties to deter such illicit activities. Ponzi scheme operators, insider traders, and market manipulators can face imprisonment of up to 10 years and substantial fines ranging from N20 million to N40 million. Furthermore, the government is empowered to recover stolen funds from fraudulent operators. This tough stance on financial crimes aims to protect investors’ savings and promote market integrity.

The act of categorizing exchanges into Composite and Non-Composite Exchanges is another significant feature of the new law. Composite Exchanges allow for multiple forms of trading, while Non-Composite Exchanges are restricted to single-security trading. This classification system is geared toward enhancing market oversight and reducing risks, ensuring a more secure trading environment.

In essence, the Investment and Securities Act 2025 represents a comprehensive and forward-thinking legal framework that promises to bring about a new era of transparency, accountability, and investor protection in Nigeria’s investment and securities landscape. By recognizing digital assets, imposing strict penalties on financial criminals, and categorizing exchanges for effective regulation, the Act sets the stage for a more robust capital market that supports Nigeria’s economic ambitions.