Crypto's Double-Edged Sword: Why Regulation Must Match Its Power

The Executive Chairman of Nigeria’s Economic and Financial Crimes Commission (EFCC), Ola Olukoyede, has issued a stark warning about the growing risks associated with cryptocurrency in the absence of robust regulatory frameworks. During a recent engagement with the Blockchain Technology Association of Nigeria (SiBAN), Olukoyede emphasized that the lack of oversight could expose the country’s financial system to large-scale abuse, including money laundering, fraud, and terrorism financing. Represented by his Chief of Staff, Michael Nze, the EFCC leader called for immediate and comprehensive regulation to safeguard Nigeria’s emerging crypto ecosystem.

Olukoyede compared cryptocurrency to Nigeria’s oil industry, noting its potential to generate substantial economic value. However, he stressed that the unregulated nature of the sector poses serious risks, particularly to inexperienced investors and the broader economy. Without proper safeguards, he warned, the country could lose control over a financial tool that is increasingly central to wealth creation and innovation. He also expressed concern that both politically exposed individuals and seemingly legitimate operators are already exploiting crypto for illicit purposes.

The EFCC Chairman reiterated that regulation is not intended to stifle innovation but to ensure that the industry grows in a secure and transparent manner. He emphasized the importance of distinguishing between genuine operators and fraudulent actors, who often exploit the anonymity and complexity of crypto transactions to launder money or engage in other illegal activities. “The thin line between legitimate and illegitimate actors is blurring,” Olukoyede said, adding that without intervention, even well-intentioned market participants are at risk of being victimized.

In response to Olukoyede’s call for regulation, SiBAN’s president, Obinna Iwuno, stated that the association has already developed a code of ethics aligned with global standards. Iwuno noted that this proactive step demonstrates the group’s readiness for regulatory oversight and its commitment to ethical compliance. He also highlighted that SiBAN has been advocating for government regulation since 2018, warning that the lack of it could result in significant capital outflows and systemic vulnerabilities.

Iwuno stressed that while regulation is essential, it must not hinder innovation. He pointed out that Nigeria has one of the largest youth populations in Africa, many of whom are actively participating in the crypto space. Without proper oversight, he warned, the country risks facing heightened threats such as money laundering, terrorism financing, and national security breaches. To mitigate these risks, SiBAN has mandated that all crypto platforms implement Know Your Customer (KYC) protocols and appoint compliance officers to ensure accountability.

The collaboration between the EFCC and SiBAN aims to strengthen investor education and awareness while improving fraud reporting mechanisms. Olukoyede encouraged the association to act as whistleblowers and to work closely with regulators in identifying and reporting illicit activities. The two parties expressed a shared commitment to fostering a secure environment for crypto innovation while protecting Nigeria’s financial integrity.