The Securities and Exchange Commission (SEC) of Nigeria has raised a red flag over an alarming surge in suspicious cryptocurrency transactions across West Africa, totaling an estimated $2.1 billion in 2024 alone. This revelation was made by the SEC’s Director-General, Dr. Emomotimi Agama, during the recent West Africa Compliance Summit organized by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), held in Praia, Cape Verde.
Dr. Agama disclosed that the region’s rapid adoption of digital assets, particularly virtual currencies and decentralised finance (DeFi) platforms, has created fertile ground for illicit financial flows, fraud schemes, and terror financing. He highlighted GIABA’s report which indicated that various terror groups are leveraging privacy-enhancing cryptocurrencies—commonly known as privacy coins—to evade surveillance and launder money across borders.
“DeFi rug pulls continue to defraud unsuspecting users. Artificial crashes, unregistered exchanges disappearing with users’ funds, and lack of adequate oversight are enabling significant financial losses for West African investors,” Agama said.
According to the SEC chief, the situation underscores the urgency of regulatory reform and multilateral cooperation. He emphasized that regulation is no longer optional but a fundamental necessity to safeguard investors and maintain financial stability.
To address these risks, Dr. Agama called for the harmonization of virtual asset regulations across the Economic Community of West African States (ECOWAS). He proposed the adoption of a Unified Virtual Asset Service Provider (VASP) Licensing System to prevent regulatory arbitrage—whereby operators banned in one country simply migrate to another within the region.
“A trader banned in Nigeria simply relocates to Ghana. We must harmonise our regulatory frameworks, share intelligence, and adopt global best practices,” he added.
In a significant policy shift, the SEC also revealed plans to introduce Artificial Intelligence-powered blockchain surveillance tools. These tools will assist in tracing the movement of illicit funds and improving oversight of digital asset exchanges, all while ensuring robust consumer protection.
In response to a series of fraudulent schemes, including the high-profile collapse of the CBEX investment platform, the SEC has launched a nationwide Ponzi Scheme Awareness Campaign. The campaign aims to educate the public about the risks of unregulated investment platforms and has already covered key urban areas like Abuja and Lagos. Plans are underway to expand outreach efforts to other states.
The CBEX platform, which operated under the guise of a legitimate crypto trading firm, reportedly vanished with billions of naira in investor funds earlier in the year. This case has further fueled calls for tighter security measures in the crypto space.
Dr. Agama’s remarks come at a time when the West African region is experiencing a fintech boom, with an increase in cryptocurrency adoption among youth and underserved communities. While this trend has spurred innovation and financial inclusion, it has also exposed users to a wave of scams and unregulated activity.
Experts at the summit echoed the need for a regional compliance framework, cross-border law enforcement collaboration, and public education to protect the integrity of West Africa’s emerging digital economy.
With suspicious cryptocurrency transactions topping $2.1 billion in just one year, Nigeria’s SEC is sounding the alarm not only for the country but for the entire West African region. Through regulatory harmonization, advanced surveillance, and public awareness, stakeholders hope to curb the exploitation of digital assets by criminals and restore trust in the fast-growing virtual finance ecosystem.