Nigeria’s EFCC urges prosecution of banks, fintechs tied to crypto scams
Nigeria’s Economic and Financial Crimes Commission (EFCC) has urged regulators to suspend and prosecute banks, fintechs and microfinance institutions that facilitate crypto and investment scams. EFCC Director of Public Affairs Wilson Uwujaren said investigations uncovered more than ₦18.7 billion in investment fraud and ₦162 billion in cryptocurrency-related transactions that passed through a ‘‘new generation’’ bank without adequate due diligence. The agency alleged one customer maintained 960 accounts used for fraud and accused one new-generation bank, six fintechs and some microfinance banks of helping launder proceeds. EFCC detailed schemes including an airline-ticket discount fraud that victimised over 700 people (approx. ₦651 million loss) and a multi-company referral investment scam that scammed over 200,000 victims and took in more than ₦18 billion; three Nigerian accomplices have been arrested. The EFCC called on regulators to enforce KYC, CDD and STRs, suspend implicated institutions, and refer them for investigation and possible prosecution. Key points: EFCC name — Wilson Uwujaren; losses uncovered — ₦18.7 billion (investment scams) and ₦162 billion (crypto flows); implicated parties — one new-generation bank, six fintechs, several microfinance banks; notable schemes — airline discount scam (700+ victims, ₦651m) and multi-company referral scam (200,000+ victims, ₦18bn).
Bearish
The EFCC’s call for suspension and prosecution of banks, fintechs and microfinance institutions tied to crypto-related fraud is likely to have a bearish effect on local crypto market confidence and trading activity. Enforcement action and tighter regulatory scrutiny typically reduce transactional liquidity and raise counterparty risk perceptions—particularly when large aggregate sums (₦162 billion in crypto flows) and specific financial institutions are named. Short-term impacts: heightened exchange withdrawals, reduced on-chain inflows from Nigeria, and increased volatility as traders de-risk and exchanges or fiat gateways tighten KYC/AML checks. Payment rails and fiat-crypto on/off ramps may slow, widening spreads and reducing volume. Medium-to-long-term impacts: stronger compliance could restore trust but increase operational costs for exchanges and fintechs, possibly consolidating the market around larger, compliant players. Past parallels: crackdowns on intermediaries in jurisdictions (e.g., Pakistan/Nigeria previous bank restrictions) caused temporary liquidity drops, higher spreads, and migration to peer-to-peer or offshore channels until clearer rules were established. Traders should watch for: official sanctions or suspensions, bank/fintch responses, changes to on-ramp availability, and any enforcement rollouts that could affect local fiat flows. Risk management actions: reduce exposure to Nigerian fiat pairs, monitor orderbook depth and spreads on affected pairs, avoid relying on single fiat rails, and prepare to capitalize on volatility if regulatory clarity emerges.