The Director-General of the Securities and Exchange Commission (SEC Nigeria), Emomotimi Agama, has raised concern over the growing threat of crypto-related financial crimes in West Africa, warning that terror groups and fraud syndicates were exploiting regulatory loopholes across the region.
Speaking at the West Africa Compliance Summit organised by GIABA in Praia, Cape Verde, Agama stressed the urgent need for harmonised virtual asset regulation and intelligence sharing among West African countries. “We must harmonize our regulatory frameworks, share intelligence, and adopt best practices to close loopholes exploited by bad actors. A trader banned in Nigeria simply relocates to Ghana. ECOWAS must adopt a Unified VASP Licensing System,” he said.
According to data cited at the summit, GIABA reported $2.1 billion in suspicious crypto-linked transactions across West Africa in 2024 alone. Agama highlighted that “DeFi ‘rug pulls’ continue to defraud unsuspecting users,” adding that “terror groups exploit privacy coins to evade detection.” He further warned that artificial crashes, unregistered exchanges absconding with investor funds, and weak enforcement structures had exposed the region to systemic risk. “Regulation, therefore, is not optional but an imperative,” he stated.
He described West Africa as a fast-growing market for virtual assets, driven by currency volatility and high remittance costs. “Over $20 billion in remittances flowed into West Africa in 2024, yet traditional channels charged up to 10 per cent in fees. Cryptocurrencies, particularly stablecoins like USDT and USDC, now offer faster, cheaper alternatives,” he said.
Agama noted that in Nigeria alone, crypto transactions exceeded $56 billion in 2024. “The naira’s volatility, Ghana’s cedi depreciation, and forex shortages have pushed citizens toward ‘crypto-dollarisation.’ Young professionals increasingly demand salaries in stablecoins, and businesses use platforms like Binance Pay for cross-border trade,” he added.
With over 60 percent of West Africa’s population under the age of 25, mobile-first crypto platforms had seen significant adoption. “Today, Nigeria ranks as the third-largest crypto adopter globally, after India and Vietnam,” the SEC DG stated.
Reflecting on Nigeria’s own regulatory journey, he acknowledged the challenges faced before recent reforms. “In 2021, the Central Bank banned banks from servicing crypto firms, pushing activity underground. In 2022, the SEC classified crypto as securities but lacked sufficient enforcement,” he said.
He explained that the introduction of the Investment and Securities Act (ISA) 2025 had since provided regulatory clarity. “Cryptocurrencies, stablecoins, utility tokens, and NFTs are now formally recognised digital assets as seen in Section 355(4) and the Second Schedule, Part I of the ISA 2025,” he said. “Exchanges, wallets, and DeFi platforms must be licensed by the SEC.”
To further strengthen monitoring and reduce the risk of illicit financial flows, Agama called for the deployment of advanced technology. “These regulatory technologies are essential, given the explosive growth we’re witnessing in virtual asset adoption across the region,” he said, urging the adoption of Regulatory Technology (RegTech) and Supervisory Technology (SupTech) across West African jurisdictions.
He disclosed that Nigeria plans to deploy AI-powered blockchain surveillance tools to improve transaction tracing. He also cited the recent collapse of the CBEX Ponzi scheme, which defrauded thousands of investors, as a reminder of the scale of the threat. “The SEC has intensified its Ponzi Awareness Campaign, already conducted across key locations in Abuja and Lagos, with plans to extend to other states nationwide,” he noted.
