An anti-money laundering specialist and certified fraud and cryptocurrency investigator, Mr Joshua Obiama, has raised concerns over regulatory loopholes in the global virtual asset system, warning that such gaps are being exploited by criminals, terrorists, and rogue regimes.
Speaking at a lecture in Benin City as part of activities marking the 2025 African Union Anti-Corruption Day, themed “Understanding Virtual Asset and Investment Fraud” and organised by the Economic and Financial Crimes Commission (EFCC), Benin Zonal Command, Obiama explained that the challenge persists because most countries are yet to implement effective regulatory frameworks for virtual assets.
He, however, acknowledged that while some countries have begun regulating the sector, others have chosen to ban virtual assets altogether.
Quoting the Financial Action Task Force (FATF), he defined virtual currency as a digital representation of value that can be traded.
“It functions as a medium of exchange and store of value, but it is not recognised as legal tender in most jurisdictions,” he stated.
He described cryptocurrency as a form of decentralised virtual currency that can be used within specific countries. According to him, Nigeria does not recognise cryptocurrency as legal tender.
Obiama disclosed that many unregulated and unregistered companies create cryptocurrencies, and their usage in Nigeria violates existing laws due to their non-recognition as legal tender.
He further identified the major criticism of cryptocurrencies as being linked to criminal activities, especially in cases where they are used for illicit transactions.
As a result, in February 2021, he recalled that the Central Bank of Nigeria (CBN) issued a directive to banks and other financial institutions prohibiting trading and payment in cryptocurrency. Additionally, the CBN ordered all financial institutions to identify and close the accounts of individuals and businesses involved in cryptocurrency transactions or operating cryptocurrency exchanges.
He reiterated that unregulated and unregistered entities create cryptocurrencies, reinforcing that their use contravenes Nigerian law.
According to Obiama, the CBN considers cryptocurrency a significant threat due to the absence of customer information, which makes it vulnerable to illicit uses such as money laundering and terrorism financing.
However, he noted that under the Investment and Securities Act 2025, signed into law by President Bola Ahmed Tinubu, cryptocurrency and other virtual/digital assets have now been classified as ‘securities.’
As such, virtual asset providers are required to register with and be regulated by the Securities and Exchange Commission (SEC).
Delivering the second lecture, themed “Investment Scam,” Mr Idris Oluremi attributed the rise in fraudulent investment schemes to the worsening economic situation, marked by high inflation, especially in food and fuel prices, and deepening poverty.
He noted that such scams are rampant in Nigeria, driven by widespread desperation. The desire to escape poverty often pushes individuals into dubious schemes that promise high returns within short periods, particularly through funding of small projects.
Meanwhile, the Chairman of the EFCC, Mr Ola Olukoyede, in an address delivered on his behalf by the Acting Benin Zonal Director, Mr Effa Okim, described illicit financial flows as a monstrous challenge to Africa’s development, with losses running into billions of dollars.
He stated that these flows stem from various criminal activities, with money laundering ranking as the most prevalent.
According to him, virtual assets are not inherently criminal, but when used wrongly or fraudulently, they become instruments of crime. He acknowledged the rising incidence of fraud involving virtual assets but assured the public that such challenges are “not hard nuts to crack.”
