Ponzi Schemes and Crypto: How the Investments and Securities Act 2025 Protects Your Money

Every year many Nigerians lose their savings to schemes that promise high returns and then collapse. The Investments and Securities Act 2025, signed on 31 March 2025, replaced the 2007 Act and gives the Securities and Exchange Commission (SEC) stronger powers over these schemes and over crypto.

Ponzi and pyramid schemes are banned

The Act specifically prohibits Ponzi and pyramid schemes. A promoter can be fined at least ₦20 million, jailed for up to 10 years, or both. The SEC can also ask the courts or the Investments and Securities Tribunal to freeze and seize the assets of such schemes.

Crypto is now under the SEC

The Act treats virtual and digital assets as securities. That brings crypto exchanges and similar platforms under SEC regulation, and they need SEC registration to operate in Nigeria. In August 2026 the SEC published draft rules for digital asset businesses, including foreign platforms that serve Nigerians. Those rules are still a draft.

Profits on crypto are also taxable under the Nigeria Tax Act 2025.

Warning signs of a Ponzi scheme

• Guaranteed high returns, often paid weekly or monthly
• Pressure to bring in friends and family so you earn more
• No clear explanation of how the money is invested
• Returns that seem to come from new members' money
• Withdrawals that are suddenly delayed or "under maintenance"

Before you invest

1. 1.Check on the SEC website that the company or platform is registered.
2. 2.Ask for the investment terms in writing and read them.
3. 3.Be very careful with investments promoted only on social media or WhatsApp.
4. 4.Never invest money you cannot afford to lose.

If you have already lost money

Keep every record: receipts, bank transfer details, screenshots and chats. Report to the SEC, and to the police or the EFCC. A lawyer can advise you on recovering your money, including taking part in court action to trace and freeze the scheme's assets.