REGULATION | Over $2 Billion in Suspicious Crypto Transactions Shake West Africa – SEC Nigeria Calls for Regional Regulatory Cooperation

West Africa’s rapid ascent as a hub for cryptocurrency adoption is being overshadowed by a disturbing surge in suspicious transactions – raising fresh concerns about the region’s financial integrity, cross-border security, and regulatory capacity.

Speaking at the West Africa Compliance Summit organised by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in Praia, Cape Verde, recently, Dr. Emomotimi Agama, Director-General, The Securities and Exchange Commission of Nigeria (SEC Nigeria), noted that over $2.1 billion in suspicious crypto flows have been traced across West Africa, with Nigeria at the epicenter.

“These figures are staggering and worrisome.

They represent potential threats not only to our financial system but also to our national security,” said Emomotimi Agama, Director General of SEC Nigeria, during a recent press briefing.

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💡 TL;DR

• Nigeria’s SEC has flagged $2.1B in suspicious crypto flows across West Africa.
• Most transactions were routed through P2P platforms that lack regulatory oversight.
• The region is simultaneously a crypto adoption hotspot and a potential financial crime vector.
• Regulatory bodies are pushing for regional cooperation and enhanced compliance frameworks.

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The GIABA 2025 Summit in Cape Verde

Themed “Adapting and Thriving in a Complex and Evolving Compliance Landscape,” the summit brought together financial regulators, compliance professionals, and security experts to address the growing challenges posed by the rapid adoption of virtual assets and decentralised finance (DeFi) in the region.

Speaking at the event, Dr. Agama revealed that cryptocurrency transactions in Nigeria alone exceeded $56 billion in 2024. He noted that more Nigerians are turning to stablecoins like USDT and USDC as a hedge against local currency volatility.

He also highlighted the increasing phenomenon of “crypto-dollarisation,” pointing out how young professionals now prefer to be paid in stablecoins, while businesses are embracing solutions like Binance Pay to facilitate cross-border payments.

“The Naira’s depreciation, Ghana’s Cedi weakness, and persistent forex shortages have fueled this shift,” he explained.

“Traditional remittance channels charge up to 10 percent in fees, while cryptocurrencies offer faster and cheaper alternatives. Over $20 billion in remittances flowed into West Africa last year through crypto channels.”

Despite these benefits, Dr. Agama raised concerns about the growing exploitation of these technologies by bad actors. He referenced GIABA’s findings that reported $2.1 billion in suspicious crypto-related transactions across West Africa in 2024, with terror financiers leveraging privacy coins to evade detection.

“Unregulated exchanges, artificial market crashes, DeFi ‘rug pulls,’ and Ponzi schemes have wiped out billions in investor funds,” he said. “The recent collapse of the CBEX Ponzi platform is just one of many such incidents. Strong regulation and regional coordination are the only path forward.”

Dr. Agama underscored Nigeria’s recent progress in this regard, particularly the passage of the Investment and Securities Act 2024, which now classifies virtual assets – such as cryptocurrencies, stablecoins, utility tokens, and NFTs – as securities under Section 355(4) and Part I of the Second Schedule.

“Under the new law, all exchanges, wallets, and DeFi platforms must be licensed by the SEC,” he stated.

“We’ve also established a Fintech and Innovation Department to facilitate ongoing dialogue with industry stakeholders and adapt our regulations to emerging realities.”

He urged West African governments to align their regulatory frameworks and bolster intelligence-sharing efforts. As part of this, he proposed the creation of a Unified Virtual Asset Service Provider (VASP) Licensing System under the ECOWAS framework.

Unmasking the Flows: What We Know So Far

SEC Nigeria has revealed that most of these suspicious transactions were routed through peer-to-peer (P2P) trading platforms, often used by retail users and traders due to their ease of use and lower regulatory scrutiny. This decentralized model, while democratizing access, has also made it harder to track illicit movements.

Dr. Agama emphasized the risks associated with such platforms:

“We discovered that some of the activities taking place on these P2P platforms are not only illegal but also pose a serious risk to our economy.”

SEC Nigeria is reportedly working closely with other regulators and financial intelligence units across the West African region to investigate these flows and develop new frameworks for oversight.

West Africa: Crypto Adoption Hotbed with Glaring Risks

West Africa has emerged as one of the most active crypto corridors on the continent, driven by currency instability, remittance needs, and youthful digital adoption.

• Nigeria
• Ghana, and
• Ivory Coast

lead the pack in P2P trading volumes in West Africa, and some estimates place Nigeria among the top crypto markets globally.

“West Africa is fast becoming a hotspot for cryptocurrency adoption,” noted Dr. Agama.

“But this growth must be matched with adequate regulatory oversight.”

He further added:

“While we support innovation and financial inclusion, the integrity of our financial systems cannot be compromised.”

Regulatory Gaps and a Race Against Time

SEC Nigeria’s alarm comes amid rising tensions between government institutions and crypto users in Nigeria, where platforms like Binance have faced crackdowns over allegations of facilitating capital flight and currency manipulation.

Agama also pointed to how foreign virtual asset service providers (VASPs) often operate without registration or oversight:

“Some of these entities are operating illegally and are not registered in Nigeria or in any of the countries within the sub-region.”

To address this, SEC Nigeria is now reviewing its Digital Assets Regulatory Framework to tighten controls over P2P platforms and crypto exchanges.

The Way Forward: Regional Cooperation and Smart Regulation

The $2.1 billion red flag has triggered a renewed push for regional cooperation, with SEC Nigeria seeking support from ECOWAS, the Financial Action Task Force (FATF), and global crypto exchanges to implement know-your-customer (KYC) and anti-money laundering (AML) standards.

Stressing that criminals exploit inconsistencies across borders to launder funds and finance illicit activities, Agama said:

“We must harmonise 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.”

The SEC boss called for support in building capacity for law enforcement, regulators, and the judiciary to better understand and respond to evolving financial technologies.

He disclosed that Nigeria plans to deploy AI surveillance tools for blockchain analytics to trace illicit activity while ensuring consumer protection and that SEC has launched a Ponzi awareness campaign, following the collapse of the CBEX scheme, which defrauded many investors.

“The campaign has already been conducted across key locations in Abuja and Lagos, with plans to extend to other states,” he added.

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