The Nigeria Economic and Financial Crimes Commission (EFCC) has brought charges against cryptocurrency trading platform, Afriq Arbitrage System (AAS), and its CEO, Jesam Michael, for allegedly committing investment fraud totaling $844,416.36, $10,000, and ₦590 million.
EFCC claims that between September 2022 and June 2023 in Abuja, Nigeria, Michael and his company, without being a licensed bank or authorized financial institution, solicited the public through advertisements to deposit money with Afriq Arbitrage System Limited.
The charge sheet includes the following allegation against the defendants:
“That you, JESAM MICHAEL UBI, and AFRIQ ARBITRAGE SYSTEM LIMITED, sometime in 2022 in Abuja, with intent to defraud, induced Ladi Musa Audu to deposit the sum of $844,416.36 USDT into the Afriq Arbitrage System investment scheme, under the false representation that the investment was safe and refundable upon request.
You knew this representation to be false, thereby committing an offence contrary to Section 1(2) of the Advance Fee Fraud and Other Related Offences Act No. 14 of 2006 and punishable under Section 1(3) of the same Act.”
According to the Commission, this act violates Section 44(1) of the Banks and Other Financial Institutions Act, 2020, and is subject to penalties under the same law.
The EFCC also accused Michael and his company of operating in the specialized field of financial services, including investment management without holding a valid license.
In August 2024, Nigeria’s Securities Exchange Commission began issuing operating licenses to companies dealing in digital assets. The commission chief warned that authorities will be taking action on entities operating outside of its regulatory purview.
🇳🇬REGULATION | Nigerian Crypto Exchange, Quidax, Receives Provisional Operating License from SEC Nigeria
With the license granted by the Nigerian SEC, Quidax is now able to collaborate with banks and other financial institutions, subject to the Central Bank of Nigeria’s… pic.twitter.com/4gPpLyJi4z
— BitKE (@BitcoinKE) August 29, 2024
However, it is now more than 7 months since more licenses were awarded to crypto firms in the country. SEC Director, General Emomotimi Agama, recently indicated the reason for the delay is due to the need for further due diligence.
🇳🇬REGULATION | Additional Level of Due Dilligence Needed Before We Announce Next Set of Provisional Crypto Licenses, Says Nigeria SEC Chief
The commission is collaborating with @officialEFCC, NFIU, and ONSAhttps://t.co/54gwAOeiq4 @SECNigeria pic.twitter.com/yHtzs87CG6
— BitKE (@BitcoinKE) April 16, 2025
As reported by BitKE, Agama pointed out that there are still shortcomings and challenges in the due diligence process for startups. He emphasized that SEC Nigeria is not the sole regulator of Nigeria’s cryptocurrency sector.
The commission is collaborating with other key agencies, including:
- The Economic and Financial Crimes Commission (EFCC)
- The Nigerian Financial Intelligence Unit (NFIU), and
- The Office of the National Security Adviser (ONSA)
all of which have their own independent procedures beyond the SEC’s control, he revealed.
Numerous startups that applied under the ARIP framework in June 2024 remain in ongoing discussions with the regulator to clarify compliance expectations and enhance consumer protection measures.
🇳🇬REGULATION | Nigeria SEC Issues a Notice for Onboarding VASPs in 30 Days Due to ‘Current Realities’
Following the 30-day-period, the Commission indicated that it would commence enforcement action against any operating VASP that fails to comply with the directives.… pic.twitter.com/ThvMC4MwFQ
— BitKE (@BitcoinKE) June 22, 2024
This isn’t the first time the EFCC has taken action against unlicensed cryptocurrency firms, as it has stepped up its crackdown in recent months.
BitKE has consistently reported on compliance violations and penalties imposed on violating entities:
- In October 2024, two crypto firms, Paparaxy Global Ventures Limited and Lemskin Technologies Limited forfeited, N160,000,000 (~$97,500) to the federal government after being convicted for providing $USDT to Naira exchanges without valid licenses.
🇳🇬REGULATION | 2 Crypto Firms Forced to Surrender ~$100,000 as #Nigeria Cracks Whip on Unlicensed Operators
The defendants admitted they engaged in negotiating #USDT against the #Naira with the public without being authorized dealers. https://t.co/tawSEcq5Vb @officialEFCC pic.twitter.com/SdO28oxgAB
— BitKE (@BitcoinKE) October 26, 2024
- In November 2024, the commission also secured a conviction against local cryptocurrency company, Plip Global Ventures, for unlawfully conducting USDT-to-Naira transactions without obtaining a banking license.
🇳🇬REGULATION | #Nigeria Continues Crackdown Against Unlicensed Crypto Firms With Latest ~$15,000 Conviction
The ruling is the latest demonstration of the EFCC’s continued legal efforts to clamp down on unlicensed USDT-to-Naira transactionshttps://t.co/46P2ZarMK3 @officialEFCC pic.twitter.com/VH9ib7X2Pv
— BitKE (@BitcoinKE) November 19, 2024
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