The Economic and Financial Crimes Commission (EFCC) has raised a fresh alarm over the growing misuse of virtual assets for fraudulent purposes.
It warned that Nigerians and foreign nationals alike are being targeted by particularly sophisticated digital investment scams.
The warning came at the 2025 African Anti-Corruption Day commemorative event held in Lagos, where the anti-graft agency used the opportunity to spotlight what it described as an “emerging wave of fraud” perpetrated under the guise of innovation.
The theme of this year’s event was: Understanding Virtual Assets and Investment Fraud.
EFCC Chairman Ola Olukoyede, represented by the Acting Zonal Director of Lagos Zone 2 Directorate, Mr. Ahmed Ghali, noted that while digital assets are not criminal in themselves, they are increasingly being exploited by politically exposed persons and organised criminal syndicates to launder stolen wealth.
He said: “Virtual assets are not inherently criminal. But when they are wrongfully or fraudulently used, they become tools of crime.
“Our findings reveal that fraudulent politicians are now concealing stolen wealth in cryptocurrency wallets to evade detection.
“The ignorance of investors is often exploited. Fraud is preventable if we all stay alert, informed, and united in action.”
Speaking on the sidelines of the event, Mr. Ghali emphasised the need for deeper synergy across sectors.
“Of course, more collaboration.There won’t be any time we don’t need it,” he said.
“The fight against corruption is not a one-man task. Everyone must be involved.”
Head of the Digital Forensics Laboratory at the EFCC Lagos Zonal Directorate, Alex Ogbole, opened the technical session with an insightful presentation on the nature and risks of blockchain-based transactions and how digital assets are being weaponised by fraudsters.
He explained that virtual assets are digital representations of value, typically stored and transferred electronically, which can be used for trading or payments.
These assets, he noted, are powered by decentralised blockchain or distributed ledger technologies (DLTs), which allow users to transact peer-to-peer without intermediaries.
He said: “Blockchain is a decentralised, distributed ledger technology designed to be immutable. Once data is recorded, it cannot be altered without changing all subsequent blocks.”
He observed that a significant number of victims lured into virtual asset fraud schemes are neither ignorant nor uneducated.
“We’re seeing cases where victims are not tech-illiterate. Many are educated professionals who fell prey to well-coordinated psychological and financial manipulation,” Ogbole said.
“The biggest threat is not the technology. It’s our ignorance of how criminals are using it.”
The evolution of cyber-enabled financial crimes was then taken up by ACE II Abbah Sambo Usman, Head of the Advance Fee Fraud Section at the Commission’s Lagos Zonal Directorate.
He offered a deep dive into how scammers deploy deceptive online platforms and digital tokens to fleece unsuspecting investors.
According to Sambo, virtual asset investment fraud, commonly referred to as “pig butchering,” involves convincing individuals to put money into fake or misleading digital assets through elaborate schemes.
Among the common tactics, he listed Ponzi schemes using virtual assets, “rug pulls” on DeFi platforms, fake trading apps, phantom projects lacking any actual technology, and fraudulent Initial Coin Offerings (ICOs).
He cited the Crypto Bridge Exchange (CBEX) as a case study, describing it as a textbook digital Ponzi scheme. The platform promised one per cent returns twice daily, plus referral bonuses.
“It looked legitimate, used industry jargon, and operated with digital precision,” Sambo said.
“But behind the scenes, it was simply a fraud factory churning out lies for profit.”
In another case, a 27-year-old Nigerian, Iheohakara Gabriel, was convicted of defrauding a Brazilian national of $30,000 in Bitcoin through a fake investment platform, britishtradelimited.com.
“He reached out to the victim via Telegram, used a polished pitch, and eventually made him deposit funds to a wallet controlled by the suspect,” Sambo explained.
Gabriel was sentenced on October 12, 2023, to one year’s imprisonment, with an option of N1 million fine and 1,000 hours of community service.
Justice Abike-Fadipe also ordered the restitution of the stolen funds and the forfeiture of an iPhone 13 Pro Max used in the scam.
Beyond prosecution, the EFCC reiterated its multi-pronged strategy against cyber fraud, which includes intelligence gathering, disruption of syndicates, and public education.
“We are not just chasing suspects; we are dismantling syndicates,” Sambo said.
“We focus on criminal intelligence, asset recovery, and partnerships. Collaboration is key. From civil society to telecoms to financial institutions.”
Nonetheless, he acknowledged several challenges facing the Commission, including poor inter-agency cooperation, jurisdictional hurdles in cross-border cases, and efforts by influential suspects to frustrate investigations.
“Corruption is fighting back,” he said. “We face threats, bribery attempts, and media manipulation from suspects trying to neutralise investigations.”
Stakeholders present at the event included representatives of Nigeria’s banking sector, the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), legal practitioners representing blockchain operators, forensic and cybersecurity experts, as well as Bureau De Change (BDC) operators.
Their presence underscored the cross-sectoral relevance of the discussion and the urgent need for a unified approach to curbing virtual asset-related crimes.
There was consensus among stakeholders that virtual asset operators in Nigeria are increasingly open to regulation.
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They noted that crypto investors are willing to come under formal regulatory oversight, but emphasised the need for a spelt-out legal and operational framework under which to operate.
BICCoN, which serves as the umbrella body for blockchain and virtual asset service providers in Nigeria, stressed the importance of structured, inclusive regulation that integrates them into the mainstream financial system.
They also expressed readiness to be treated as fintech operators, comply with tax obligations, and contribute meaningfully to the Nigerian economy.
Participants also reviewed Nigeria’s evolving regulatory environment.
In February 2021, the Central Bank banned financial institutions from facilitating cryptocurrency transactions.
However, in late 2023, the apex bank relaxed its position to allow limited and regulated usage.
Similarly, the SEC has issued a regulatory framework that categorises certain crypto assets as securities, thereby requiring compliance with securities and anti-money laundering laws.
The NFIU, working in tandem with the EFCC and law enforcement, has strengthened digital forensic capabilities and mandated the reporting of suspicious transactions linked to digital assets.
The Cybercrime Act of 2015 also continues to provide a legal backbone for prosecuting related offences such as hacking, phishing, and online fraud.
There were calls for a formal Memorandum of Understanding between regulators, law enforcement, and digital asset service providers to facilitate real-time intelligence sharing, operational coordination, and responsive regulation.
The session concluded on a note of optimism and vigilance, with a shared understanding that virtual asset fraud represents a fast-evolving threat, one that demands proactive regulation, robust enforcement, and sustained public education.
