Nigeria’s Financial Watchdogs Join Forces: SEC, CBN, and EFCC Launch Crackdown on Illicit Digital Wallets

In a groundbreaking move aimed at tightening Nigeria’s financial surveillance system, the Securities and Exchange Commission (SEC) has announced a new joint operation with the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) to track, monitor, and freeze illicit digital wallets associated with money laundering, cryptocurrency scams, and other financial crimes. The unprecedented partnership marks one of the strongest multi-agency collaborations in recent years, underscoring the government’s growing concern over the rising wave of digital fraud and unregulated crypto activity in the country.

According to the SEC, the move is part of a broader national strategy to protect investors, maintain financial stability, and restore public confidence in the digital asset space, which has been plagued by fraudsters and Ponzi-like schemes posing as investment platforms. The commission said the operation will target both individual and institutional digital wallets that have been linked to suspicious transactions or unlawful financial activities, particularly those operating outside the regulatory framework.

The SEC’s Director-General, Lamido Yuguda, in a statement on Thursday, emphasized that the collaboration between the three agencies represents a “united front against digital financial crime.” He revealed that the operation will combine the regulatory oversight of the SEC, the monetary intelligence capabilities of the CBN, and the investigative authority of the EFCC to ensure that all illicit funds circulating through digital channels are identified and frozen.

“This partnership is a major step towards sanitizing the digital financial ecosystem,” Yuguda said. “We are witnessing a surge in digital transactions, and while innovation is welcome, we must ensure that technology is not weaponized by criminals. Through this alliance, we aim to dismantle networks that exploit crypto wallets for money laundering, terrorism financing, and illegal capital flight.”

The SEC also disclosed that the collaboration will include the deployment of advanced tracking technology and blockchain analytics tools capable of tracing transactions across multiple digital wallets and crypto exchanges. This will allow regulators to trace the flow of funds and identify the beneficiaries behind anonymous wallet addresses — a major challenge that has long hindered anti-fraud investigations in the crypto space.

A senior official at the CBN, who spoke on condition of anonymity, noted that the central bank’s role in the partnership would focus on enforcing compliance among financial institutions and payment service providers that interface with digital assets. “We will be leveraging our regulatory powers to ensure that banks and fintechs do not facilitate transactions linked to unregistered or suspicious digital wallets. Any entity found to be aiding such activities will face severe sanctions,” the official stated.

The partnership comes at a time when Nigeria, Africa’s largest crypto market, is grappling with a surge in online investment scams disguised as blockchain projects or trading platforms. Over the past two years, thousands of Nigerians have reportedly lost billions of naira to fraudulent schemes promising unrealistic returns through cryptocurrency trading or staking. The situation has not only fueled financial losses but also eroded trust in legitimate blockchain innovations.

The EFCC, which has been at the forefront of investigating cyber and financial crimes, said the joint task force will focus on tracking down individuals who use digital wallets to conceal or move proceeds from illegal activities. In a statement, EFCC spokesperson Dele Oyewale explained that the commission has already identified several high-risk wallets under investigation. “We are currently analyzing transaction patterns to establish links to criminal syndicates operating through encrypted channels,” Oyewale said. “The collaboration with SEC and CBN will enable us to act faster and more efficiently in freezing suspect accounts and recovering stolen assets.”

Experts believe the move could be a game-changer in Nigeria’s ongoing battle against cybercrime, though it may also raise questions about data privacy and the potential for overregulation. Some fintech analysts have warned that without clear operational guidelines, the crackdown could affect legitimate digital asset holders and investors who operate in compliance with existing laws. Others argue that it’s a necessary step to clean up a sector that has become a haven for fraud.

Dr. Tunde Ajayi, a financial technology analyst based in Lagos, praised the partnership as a “bold and timely move,” noting that Nigeria’s crypto space has become too porous. “The truth is, a lot of unregulated activities are taking place behind the scenes. We’ve seen people lose life savings to fake exchanges that vanish overnight. The fact that SEC, CBN, and EFCC are now working together means there’s finally a coordinated structure to detect and stop these crimes before they spread,” he said.

However, he also cautioned that regulators must balance enforcement with innovation. “Crypto and digital finance are the future. Nigeria must not discourage innovation by painting all crypto activities as criminal. Instead, the focus should be on education, registration, and collaboration with genuine operators,” Ajayi added.

The SEC has, in recent months, intensified its efforts to bring digital asset operators under regulatory supervision. Earlier this year, the commission released new guidelines mandating all Virtual Asset Service Providers (VASPs) — including crypto exchanges and wallet operators — to register and obtain approval before offering services in Nigeria. The move was seen as part of the government’s broader plan to formalize the digital asset ecosystem and mitigate risks associated with anonymity and volatility.

Meanwhile, the CBN, which previously banned banks from facilitating crypto transactions in 2021, has gradually softened its stance. In December 2023, it issued new guidelines allowing banks to open accounts for registered VASPs, signaling a shift from outright restriction to controlled engagement. The latest joint operation with the SEC and EFCC appears to build on this framework — encouraging innovation but with firm oversight.

Reactions from the public have been mixed. While some Nigerians see the crackdown as long overdue, others express skepticism, citing concerns about selective enforcement or potential misuse of regulatory power. On social media, conversations have ranged from support for cleaning up “crypto fraudsters” to fears that “the government might use this to control people’s money.”

Nevertheless, the three agencies insist that the move is purely targeted at criminal elements. They maintain that compliant investors and registered platforms have nothing to fear. “We are not out to stifle digital finance,” the SEC reiterated in its statement. “Our mission is to ensure that technology-driven finance operates within the bounds of transparency, accountability, and integrity.”

As Nigeria continues its digital transformation journey, the collaboration between SEC, CBN, and EFCC signals a new era of inter-agency cooperation aimed at safeguarding the country’s financial future. Whether this joint crackdown becomes the turning point in Nigeria’s fight against financial cybercrime will depend largely on how effectively these institutions can balance regulation with innovation, enforcement with fairness, and control with trust.

But for now, the message is clear — the era of anonymous digital crime may be drawing to a close, and the Nigerian government is finally ready to confront the darker side of its booming digital economy head-on.