Nigeria’s EFCC Unveils $42K Crypto Fraud Takedown in Landmark Case

The Economic and Financial Crimes Commission (EFCC) in Nigeria has intensified its efforts to combat cryptocurrency-related fraud, following a high-profile case involving a U.S.-based fraudulent scheme. Dennis Tamarakuro, also known as Keisha Reynolds, was arraigned for defrauding a non-governmental organization of $71,795.41 in December 2024. The case, detailed in a court statement, highlighted how Tamarakuro operated under a false identity to lure victims into investing via the Bybit cryptocurrency exchange [1]. The EFCC investigation revealed that the stolen funds were laundered through Bybit and the Busha platform, with the commission recovering over $42,000 in cryptocurrency and blocking additional funds amounting to $22,157.40 and $20,121.41 [1].

Tamarakuro pleaded guilty during the court proceedings, and Justice Emeka Nwite sentenced him to a one-year prison term or a N1 million fine. The court also mandated Tamarakuro to submit an affidavit of good conduct, though the defense counsel had sought leniency citing the defendant's status as a first-time offender and a caregiver to an elderly mother [1]. The case underscores the commission’s increasing focus on virtual asset crimes, with EFCC Chairman Mr. Ola Olukoyede having previously warned about the growing threat of such scams across Africa.

The Nigerian case is part of a broader global trend of cryptocurrency fraud. In the United States, the Justice Department recently filed a civil forfeiture complaint targeting $868,247 in Tether (USDT) linked to cryptocurrency-related confidence scams. The funds were allegedly obtained from at least four victims across multiple states and laundered through complex cryptocurrency wallet networks [2]. The FBI Honolulu Field Office led the investigation after one victim reported losing $1.3 million to a fraudulent scheme operated by the LME Crypto Group, which impersonated the London Metal Exchange [2].

Cryptocurrency investment fraud often begins with criminals contacting victims via seemingly innocent communication channels such as text messages or online groups. Once trust is established, perpetrators guide victims to fake investment platforms and encourage them to transfer funds, often showing early returns to maintain credibility [2]. These tactics are designed to create a false sense of security, with victims eventually losing access to their funds and being provided excuses for the inability to withdraw.

In 2024, the FBI’s Internet Crime Complaint Center (IC3) recorded approximately $5.8 billion in losses from cryptocurrency investment fraud, signaling a significant rise in such crimes. The U.S. Attorney’s Office for the District of Columbia has emphasized the importance of victims reporting such crimes to the IC3 for investigation and potential recovery of stolen funds [2]. The Justice Department’s recent actions, including collaboration with Tether and the FBI’s Virtual Asset Unit, highlight the increasing complexity of cryptocurrency fraud and the need for cross-border cooperation in enforcement efforts.

The cases in Nigeria and the United States reflect a common pattern in which fraudsters exploit the anonymity and global reach of cryptocurrencies to defraud victims. As digital platforms become more integrated into financial systems, the risk of fraudulent schemes also rises, necessitating stronger regulatory frameworks and greater public awareness. The EFCC and similar agencies are now under pressure to enhance their capacity to detect and dismantle such operations, particularly as scammers continue to evolve their methods [1].

Source:

[1] Fake Investor Arraigned in $71K EFCC Fraud Case (https://punchng.com/efcc-arraigns-fake-investor-over-71000-fraud/)

[2] District of Columbia | Justice Department Seeks Forfeiture ... (https://www.justice.gov/usao-dc/pr/justice-department-seeks-forfeiture-848247-cryptocurrency-confidence-scams)