Cryptocurrency Regulation and Financial Crime in Nigeria

The rapid expansion of cryptocurrency in Nigeria has generated significant opportunities for financial innovation, digital entrepreneurship, financial inclusion and alternative forms of value transfer. At the same time, the pseudonymous, decentralised and transnational characteristics of cryptocurrency transactions have created new challenges for the prevention and control of financial crime. This article examines the relationship between cryptocurrency regulation and financial crime in Nigeria, with particular attention to money laundering, fraud, terrorist financing, tax evasion and illicit financial flows. It critically analyses Nigeria’s evolving regulatory framework and the roles of key institutions, particularly the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Financial Intelligence Unit and the Economic and Financial Crimes Commission. The article argues that the historical tendency to approach cryptocurrency primarily through restriction or prohibition is inadequate for addressing the complexities of contemporary digital-asset activities. While regulation is necessary to protect financial-system integrity, investors and consumers, excessive restrictions may encourage informal markets, regulatory evasion and the migration of cryptocurrency activities beyond effective oversight. The study therefore advocates a coordinated, risk-based and technology-sensitive regulatory framework that distinguishes legitimate cryptocurrency activities from their criminal exploitation. It recommends stronger know-your-customer and beneficial-ownership requirements, improved blockchain-analytics capacity, enhanced inter-agency cooperation, effective digital-asset investigation and recovery mechanisms, and stronger international collaboration. The article concludes that Nigeria can effectively combat cryptocurrency-related financial crime without undermining legitimate innovation by combining proportionate regulation, technological capacity, institutional coordination and robust enforcement.

Cryptocurrency; Regulation; Financial Crime; Money Laundering; Blockchain; Virtual Assets; Nigeria.

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