Weak Regulation Opens Crypto Investors to Fraud, Nigeria’s EFCC Warns - Here’s What You Need to Know

Nigeria's Economic and Financial Crimes Commission sounds alarm on crypto vulnerability.

The Regulatory Gap

Weak oversight creates playground for bad actors—EFCC exposes how fraudsters exploit regulatory gray areas in Africa's largest crypto market. Investors left holding the bag while scammers pocket digital fortunes.

Market Realities

Unregulated spaces attract both innovators and opportunists. Nigeria's crypto surge meets minimal protection frameworks—creating perfect conditions for sophisticated schemes targeting both new and experienced investors.

Finance's oldest story: where there's money moving fast, someone's always ready to 'help' you lose it faster.

EFCC Chairman reiterates the need for crypto regulation in Nigeria

Olukoyede described crypto as the new oil, noting that there is so much money to be made in the industry. However, he noted that the ecosystem needs to be properly regulated, noting that it would help people thrive without stifling innovation in the space.

The EFCC boss also added that without proper regulation, genuine actors in the space are also bound to fall prey to bad elements looking to take advantage of their inexperience, haste, or the need to make money.

“There is a thin line between genuine crypto operators and fraudsters. Sadly, we are seeing politically exposed persons and even so-called legitimate actors exploiting crypto for laundering money,” Olukoyede said.

He also urged SiBAN and other blockchain-affiliated stakeholders to ensure they carry out prompt awareness and education for people looking to enter the scene.

Further, Olukoyede charged the association to play its part in curbing the menace of bad actors in the space, noting that they can do well to report them to the relevant authorities. “You can collaborate with us to stop money laundering. You can blow the whistle. You can be whistleblowers. The more enlightenment and training we provide, the stronger our economy becomes,” he added.

SiBAN president calls for regulation without stifling innovation

Obinna Iwuno, as part of his remarks, said the association has already come up with a code of ethics modeled after the best global practices, revealing its readiness for regulation in the crypto industry. “We have drawn from international standards to create a code of ethics for practitioners and operators in Nigeria. This demonstrates our commitment to be ethical, regulated, and compliant with both local and global laws,” Iwuno said.

Iwuno stressed that the group has been calling on the government to regulate the crypto space since it became mainstream in 2018, noting that without it, the country risks losing out on capital. He added that SiBAN is keen to collaborate with the EFCC in creating awareness through investor education, anti-scam campaigns, and different fraud reporting methods. In his words, Iwuno claimed that the group had already mandated Know Your Customer (KYC) compliance for crypto platforms.

The group also mentioned that they have instructed crypto firms and related platforms to set up a compliance officer to ensure they are accountable. However, Iwuno cautioned that while regulation is great for any country, it should not hinder the growth of the crypto industry. “As much as we push for regulation, we also want to make sure innovation is not strangulated,” he said.

He highlighted that Nigeria has one of the highest youth populations in Africa, and most of them are very active in the crypto space. “However, without proper regulation, we stand at risk of money laundering, terrorism financing, threats to national security, and proliferation financing,” he said. 

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