Table of Contents
TL;DR,
- SEC Nigeria, partnering with CBN and EFCC, is freezing crypto wallets to combat Ponzi fraud, which has cost Nigerians over ₦174 billion ($112 million).
- The new Investment and Securities Act 2025 (ISA 2025) gives SEC Nigeria the legal power to classify crypto as securities, monitor telecoms data, and impose severe penalties including 10-year prison sentences for fraudsters.
- SEC Nigeria is also fostering innovation through programs like the Accelerated Regulatory Incubation, aiming to balance market integrity with creative growth in the digital asset space.
For Africa, 2025 is a year for stablecoins, developer camps, and crypto regulation, with Nigeria leading the frontier. Amid its recent exploits, SEC Nigeria has formally announced a partnership with the Central Bank of Nigeria (CBN)and the Economic and Financial Crimes Commission (EFCC) to share intelligence, monitor suspicious flows, and freeze illicit digital wallets.
As Africa’s largest crypto community, the region is also the continent’s leading crypto scam hub. SEC Nigeria, the official financial watchdog of digital assets as per the ISA 2025, intends to freeze any crypto wallet with any link towards money laundering, cryptocurrency fraud, and terrorism financing.
A united front against cryptocurrency fraud
Digital assets have made their mark on Nigeria, with its SEC advocating for adoption, endorsing its own local stablecoin (CNGN), and opting for a unified regulatory front. Speaking at its 2025 Journalists’ Academy in Abuja, Director-General Dr. Emomotimi Agama (represented by Mrs. Efe Ebelo, Head of External Relations) made it clear that alongside adoption, a crackdown on cryptocurrency fraud will commence.
“To strengthen enforcement, the SEC is working closely with the Central Bank of Nigeria and the Economic and Financial Crimes Commission to freeze illicit digital wallets and recover criminal proceeds. Our goal is to ensure that innovation serves progress, not predation.”
The alliance establishes formal intelligence-sharing protocols, coordinated monitoring of suspicious digital wallets, and joint authority to freeze illicit digital wallets linked to criminal activity. Their concern is valid, with CBN’s Financial Stability Report revealing that fraud in the financial sector has surged by 45% in a single year. According to the report, 70% of losses are tied to digital channels and virtual asset platforms.
A third of Nigerians engage in crypto-related activity, with the region accounting for the majority of local developers. Global blockchains like Base, Lisk, Ethereum, and Solana immediately set up shop within the regions, and for most competitors, out of Africa’s big three, Nigeria tops the list for growing users and market.
While the scale of adoption is admirable, it’s slowly become a breeding ground for fake wallet apps, phishing, ransomware, Ponzi operations, and other vectors behind mounting crypto scams in Nigeria. Abdulrasheed Dan‑Abu of the SEC’s Fintech and Innovation Department revealed that Nigerians have lost over $112 million (₦174 billion) to more than 440 Ponzi schemes. Fraudsters now deploy artificial intelligence and deepfake technology to fabricate celebrity endorsements, creating an illusion of legitimacy that even cautious investors struggle to penetrate.
SEC Nigeria’s answer utilizes blockchain analytics and AI to trace transactions, detect fraud, and monitor market integrity with EFCC and partners with CBN to create broader regulation.
A Comprehensive Legislative Arsenal Against Cryptocurrency Fraud
SEC Nigeria has legally prepared to counter this rising threat over the years. Its first attempt was the 2022 Rules on Digital Assets, which established licensing, compliance, and transparency standards for Virtual Asset Service Providers (VASPs). The DAR incorporated global anti-money-laundering (AML) and counter-terrorism-financing (CFT) to essentially choke off on‑ramps that fuel crypto scams in Nigeria.
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However, this framework presented significant loopholes that didn’t fully account for the wide applicability of cryptocurrency, leading to its next and most comprehensive iteration, the Investment and Securities Act 2025 (ISA 2025).
ISA 2025 was signed into law on March 29, 2025. Section 196 explicitly criminalizes the operation and promotion of Ponzi, pyramid, and other unauthorized investment schemes. The mandate included penalties such as a minimum fine of $13,800 (₦20 million) and up to 10 years in prison.
Sec Nigeria at the 2025 Journalists’ Academy in Abuja, [Photo: Oriental News]
Regulations extend to ensure quality technical expertise, mandating all crypto operators to implement secure coding, encryption, backups, and vulnerability assessments. An added advantage, given how centralized exchanges are prone to hackers.
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While scrutiny is emphasized, Nigeria also understands that blockchain is the future. The Accelerated Regulatory Incubation Program (launched June 2024) paves the way for local platforms to maneuver compliance requirements. Currently Busha and Quidax received Approval-in-Principle in August 2024, and other firms continue to test their products under the regulated incubation. Various requirements include $346,500 (₦500 million) minimum paid‑up capital, a fidelity bond, robust KYC, and technology safeguards.
During the event, Dr. Agama stated:
“If regulators clamp down too hard, innovation migrates offshore; if they regulate too softly, risks multiply. Our task is to find the right balance, one that encourages creativity while protecting Nigerians from exploitation.”
Inside the EFCC cryptocurrency investigation pipeline
This recent mandate to tackle crypto scams in Nigeria head-on is mainly fueled by EFCC cryptocurrency investigations. In under five years the growing number of Ponzi schemes and “suspicious” transactions have rocked EFCC radars. The most recent scenario involved the CBEX (Crypto Bridge Exchange), which collapsed in April 2025 and involved Nigeria and Kenya communities.
The SEC had issued a public warning to its citizens regarding the exchange, and shortly after, its operators and entire operation vanished. Over 1 million Nigerian investors lost more than $800 million. Currently the EFCC is working with Interpol and the FBI to trace the suspects. So far, through blockchain forensics, operators have used cross-chain bridges to obscure transaction trails, a factor that this new alliance accounts for.
Concluding the talks, Dr. Agama stated:
“The future of finance is digital, but its foundation must remain ethical, transparent, and trustworthy. Trust is the ultimate currency, and as regulators, our highest duty is to preserve it.”
