The Director-General of the Securities and Exchange Commission (SEC) of Nigeria, Emomotimi Agama, has voiced serious concerns regarding the escalating volume of suspicious cryptocurrency transactions within West Africa. Citing a report from the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), Agama revealed a staggering $2.1 billion in suspicious crypto-linked transactions were recorded across the region in 2024. This alarming figure highlights the growing attractiveness of the digital asset space for illicit activities, even as cryptocurrency adoption continues to expand rapidly. Agama’s remarks underscore the urgent need for robust regulatory frameworks and enhanced regional cooperation to combat the misuse of cryptocurrencies for criminal purposes.
Agama, speaking at the West Africa Compliance Summit organized by GIABA in Praia, Cape Verde, emphasized that the rapid growth of the digital asset market has unfortunately attracted a surge in malicious actors exploiting its vulnerabilities. He highlighted various fraudulent schemes prevalent in the cryptocurrency ecosystem, including “rug pulls” in the decentralized finance (DeFi) sector, where developers abandon projects and abscond with investors’ funds. The situation is further exacerbated by artificial market crashes orchestrated by manipulators, unregistered exchanges vanishing with customer assets, and a general lack of adequate oversight, leading to substantial financial losses for unsuspecting investors. These challenges, according to Agama, necessitate immediate regulatory intervention, making it not just an option but a critical imperative for the stability and integrity of the financial system.
The SEC Director-General stressed the importance of a unified regional approach to combatting crypto-related crime. Agama pointed to the ease with which bad actors circumvent national regulations by simply relocating their operations to a different country within the region, citing the example of a trader banned in Nigeria relocating to Ghana. This highlights the limitations of isolated national efforts and reinforces the need for a harmonized regulatory framework across the Economic Community of West African States (ECOWAS). Agama advocated for the implementation of a Unified Virtual Asset Service Provider (VASP) Licensing System across ECOWAS, which would standardize regulations and facilitate information sharing among member states, effectively closing loopholes currently exploited by criminals.
Furthermore, Agama detailed Nigeria’s proactive steps towards strengthening its oversight of the digital asset space. He revealed plans to deploy advanced artificial intelligence (AI) surveillance tools for blockchain analytics, enabling authorities to trace illicit cryptocurrency activity more effectively. This technology will play a crucial role in identifying and tracking suspicious transactions, providing critical intelligence for law enforcement agencies. In addition to these technological advancements, Agama emphasized the SEC’s commitment to consumer protection, recognizing the vulnerability of individuals to scams and fraudulent schemes within the cryptocurrency market. These efforts aim to create a safer and more transparent environment for investors while deterring criminal activities.
Agama also highlighted the SEC’s proactive approach to investor education and awareness. Following the collapse of the CBEX Ponzi scheme, which defrauded numerous investors, the SEC launched a public awareness campaign to educate the public about the risks associated with such schemes. The campaign, already conducted in key locations within Abuja and Lagos, aims to equip individuals with the knowledge and tools to identify and avoid fraudulent investment opportunities. The SEC plans to expand this campaign to other states across Nigeria, demonstrating its commitment to protecting investors from financial harm. This initiative is particularly important given the relative novelty of the cryptocurrency space and the susceptibility of less experienced investors to scams and misleading information.
In conclusion, Agama’s pronouncements at the West Africa Compliance Summit paint a stark picture of the challenges posed by the rise of cryptocurrency-related crime in the region. The significant volume of suspicious transactions, coupled with the sophisticated tactics employed by malicious actors, demands a comprehensive and coordinated response. His emphasis on regional cooperation, the implementation of a unified licensing system, the deployment of advanced surveillance technologies, and proactive investor education initiatives underscores the SEC’s commitment to fostering a secure and transparent digital asset ecosystem. The path forward requires a concerted effort from regional bodies, national regulators, and industry stakeholders to effectively mitigate the risks and harness the potential benefits of cryptocurrencies while protecting investors from the growing threat of financial crime.
