Senate Seeks Stronger Laws to Regulate Fintechs, Crack Down on Ponzi Schemes

Nigeria’s Senate has called for stronger regulations to bring financial technology companies under stricter supervision as part of efforts to combat financial fraud and protect investors.

The call was made by Adetokunbo Abiru, Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, during a one-day public hearing at the National Assembly of Nigeria in Abuja.

The joint hearing—organized by the Senate Committees on Banking; ICT and Cyber Security; Capital Market; and Anti-Corruption and Financial Crimes—focused on strengthening Nigeria’s financial regulatory framework amid rapid digital growth and increasing cases of financial fraud.

Lawmakers also reviewed the activities of Ponzi schemes in the country, particularly the recent collapse of the Crypto Bullion Exchange (CBEX), which reportedly caused major financial losses for many Nigerians.

During his remarks, Abiru proposed amendments to the Banks and Other Financial Institutions Act 2020 to clearly place fintech companies under the supervisory authority of the Central Bank of Nigeria.

He explained that the amendment would establish a clear legal framework for identifying, registering, and supervising Systemically Important Institutions, especially technology-driven financial service providers.

According to the senator, the proposed changes would allow the CBN to officially designate certain fintech and digital financial institutions as Systemically Important Institutions. It would also create a national registry to promote transparency, ensure disclosure of beneficial ownership, and strengthen risk-based supervision tailored to technology-enabled financial services.

Beyond fintech regulation, the Senate expressed serious concern over the growing number of fraudulent digital investment platforms and Ponzi schemes operating in the country.

Abiru noted that the CBEX incident highlighted the devastating impact of such schemes, which reportedly affected young professionals, retirees, traders, small business owners, and students.

He warned that fraudulent investment platforms not only cause personal financial losses but also weaken public trust in legitimate financial institutions, distort the allocation of capital, harm Nigeria’s financial reputation, and increase the risk of money laundering and illicit financial flows.

Following its investigation into regulatory gaps and coordination challenges among agencies, the Senate proposed tougher measures aimed at curbing fraudulent schemes and improving collaboration between financial regulators.