The Central Bank of Nigeria (CBN) has raised the alarm over a significant rise in financial fraud cases in the economy, noting that scourge surged by 45% within one year, with 70% of the reported losses traced to digital channels, particularly unregulated virtual asset platforms.
According to the apex bank’s Governor, Olayemi Cardoso, in a speech delivered on his behalf by Muhammad Sani Abdullahi, Deputy Governor for Economic Policy, at a public lecture organized by the Economic and Financial Crimes Commission (EFCC) on Thursday, July 10, 2025, in Abuja, findings from the Financial Stability Report 2024 reveal a sharp increase in fraud cases.
But, some analysts say the losses are ocassioned by lack of synergy as well as supervisory laxity in and between some government institutions like, the Securities and Exchange Commission, (SEC), possibly Nigerian Stock Exchange. (NGX) and the apex bank itself wjich are responsible for ensuring a stable and secure digital asset ecosystem in Nigeria.
CBN regulates banks and financial institutions’ relationships with Virtual Asset Service Providers (VASPs) and Digital Assets (DA) entities, sets minimum standards and requirements for banking business relationships and account opening for VASPs, as well as overseeing compliance with anti-money laundering and know-your-customer regulations, among others.
They further argue that although NGX may not be directly involved in the context of digital assets regulation, it is expected to work in tandem with SEC to ensure that digital assets listed on the exchange comply with relevant regulations.
Similarly, some of these infractions could be detected from the monthly and quarterly reports by the Banks as well as the ocassional supervisoons by CBN
Specifically, according to Cardoso, “The CBN Financial Stability Report 2024 reveals a 45% surge in financial fraud cases, with 70% of losses linked to digital channels, including unregulated virtual asset platforms.
Furthermore, over 30 Ponzi-style investment schemes exploiting digital currency narratives have been flagged by the SEC and other agencies.
“These developments pose major risks, including loss of consumer confidence, weakening of financial integrity and reputational challenges for Nigeria in the global financial system.
“In Nigeria, over $56 billion in crypto-related transactions were recorded between July 2022 and June 2023, making us Africa’s digital transaction leader. But this growth is not without consequences.”
The CBN Governor further noted that while digital innovation has enabled broader financial inclusion, it has also introduced complex regulatory and security challenges.
“The present era of rapid technological transformation has made the adoption of digital financial services in Nigeria, including cryptocurrencies and tokenized investments, increase exponentially.
“The surge in digital innovation has brought benefits, such as greater financial inclusion and also given rise to complex challenges, such as fraud and money laundering,” he stated
Interestinfly, Emomotiti Agama, Director General of SEC, emphasized the growing risks posed by virtual asset fraud to investor confidence and market integrity.
“Corruption remains a significant impediment to Africa’s economic growth, social development, and investor confidence.
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“Today, as digital innovation transforms financial systems, we face new challenges, particularly the rise of virtual asset fraud and sophisticated investment scams, exploiting unsuspecting investors.
“These threats undermine market integrity, erode trust, and divert resources meant for sustainable development,” he said
Agama reiterated SEC’s dedication to enhancing investor protection through increased education and awareness on how to identify and avoid fraudulent schemes.
He also emphasized the Commission’s efforts to update regulatory frameworks in response to emerging risks in virtual assets and digital investments, while promoting international cooperation to tackle corruption and illicit financial flows.
The Registrar General of the Corporate Affairs Commission (CAC), Hussaini Ishaq Magaji, stressed the need for regulators, institutions, and stakeholders to remain vigilant and proactive in addressing emerging threats such as fraud, money laundering, and financial manipulation.
Magaji noted the CAC’s ongoing collaboration with the Securities and Exchange Commission (SEC) and other sector-specific regulators to strengthen corporate governance and enforce compliance, ensuring transparency and accountability within Nigeria’s financial ecosystem.
But the analysts insist that the recent surge in financial fraud in Nigeria and particularly the current one with a 45% increase and 70% of losses linked to digital platforms, has indeed put the SEC under scrutiny. The SEC’s regulatory framework for digital assets, including cryptocurrencies and virtual assets, aims to protect investors and maintain market integrity.
Earlier this week, the senate resolved to investigate CBN and SEC over their failure to prevent the operations of CryptoBridge Exchange (CBEX), a fraudulent digital investment platform that defrauded Nigerians of over N1.3 trillion.
In April 2025, reports emerged that Nigerians lost over $1 billion to CBEX after the Ponzi scheme crashed.
The resolution followed a motion sponsored by Tokunbo Abiru, senator representing Lagos east, and Osita Izunaso, senator representing Imo west, during plenary.
The lawmakers said CBEX promised investors outrageous returns before suddenly collapsing, making it one of the most devastating Ponzi schemes in the country’s history.
The senate expressed shock that CBEX operated for an extended period without regulatory intervention from the CBN, SEC, the Nigerian Financial Intelligence Unit (NFIU), or the Economic and Financial Crimes Commission (EFCC).
It said the lack of timely action by the agencies enabled the platform to thrive, deceiving millions of Nigerians through aggressive marketing tactics, including referral bonuses, fake testimonials, and celebrity endorsements.
Also, earlier in the year, CBN raised the alarm, alleging that about $26bn left the economy through Binance operations, blaming SEC for it, a figure, Binance’s Head of Financial Crime Compliance, Tigran Gambaryan, later denied.
In a post on X (formerly Twitter) in February, Gambaryan stated that the $26bn figure quoted by the CBN was misleading, emphasising that it represented a cumulative trade volume, not actual funds that left Nigeria.
