Nigeria's Securities and Exchange Commission (SEC) is expressing concerns over the rising tide of suspicious cryptocurrency activities in West Africa. This worry comes just a few days after a report found that the area experienced $2.1 billion in suspicious crypto transactions in Q1 2024. To its credit, the SEC is policing the problem with gusto. They are conducting awareness programs and ramping up their surveillance of the digital asset market, among other activities.
Dr. Emomotimi Agama, the Director-General of Nigeria’s SEC, has thrown down the challenge in his remarks at this year’s West Africa Compliance Summit. The Forum held in Praia, Cape Verde. He vehemently emphasized that bad actors are taking advantage of gaps in regulation and compliance. This exploitation erodes all of the benefits that virtual assets are meant to provide.
In a 2014 study, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) found. Among other things, it revealed that West Africa was the epicenter of $2.1 billion in suspicious cryptocurrency transactions in 2024.
In light of these shocking trends, Nigeria’s SEC has introduced a national awareness campaign. This effort is even being rolled out in cities like Lagos and Abuja. This program’s public outreach helps warn consumers of prevalent scam operations. It helps combat the risks of scams such as CBEX, which has conned Nigerians out of billions of dollars. Subsequent inquiries revealed that CBEX was run as a Ponzi scheme. On the whole, total losses are estimated at about $6.1 million.
Dr. Agama emphasized the need for regional cooperation to successfully take on these nefarious activities.
"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." - Dr. Emomotimi Agama
Dr. Agama further raised the concern of the role decentralized finance (DeFi) plays in such illicit activities.
"DeFi ‘rug pulls’ continue to defraud unsuspecting users. GIABA reported $2.1 bn in suspicious crypto-linked transactions in West Africa in 2024, with terror groups exploiting privacy coins to evade detection." - Dr. Emomotimi Agama
Following the recent FTX crash, Nigeria’s SEC is increasing its oversight of the digital asset market. At the same time, they are taking steps to prevent future victimization.
