The cryptocurrency market has faced significant challenges since the start of 2025.
While many anticipated a bullish surge following the inauguration of U.S. President Donald Trump, the reality has been marked by downturns and uncertainties.
In February, Bybit, one of the leading cryptocurrency exchanges, experienced one of the largest heists in the industry’s history, losing approximately $1.5 billion to hackers.
This incident has raised serious concerns among investors and traders about the security of their assets. In response, Bybit swiftly sought to mitigate the crisis through funding efforts, though the damage to its reputation may be substantial.
Massive arrest of foreign nationals
Back in Nigeria, the Economic and Financial Crimes Commission (EFCC) arrested dozens of foreign nationals in Lagos, including 148 Chinese, 40 Filipinos, two Kharzartans, one Pakistani, and one Indonesian, for their alleged involvement in cryptocurrency investment fraud and romance scams.
The EFCC also raised an alarm that foreign nationals are training young Nigerians to engage in cryptocurrency fraud. The commission has since initiated legal action, with the accused currently remanded as court trials proceed.
According to the Chainalysis 2025 Crypto Crime Report released in February, over the past five years, illicit addresses received a staggering $178 billion in cryptocurrency value. The year 2022 recorded the highest figure at $54.3 billion, followed by 2023 ($46.1 billion) and 2024 ($40.9 billion).
Stablecoins accounted for the majority (63%) of illicit transaction volumes, highlighting a shift away from Bitcoin. Despite ecosystem-wide trends, certain forms of crypto crime, including ransomware and darknet market transactions, remain dominated by Bitcoin.
The report further revealed a 21% year-over-year (YoY) increase in stolen funds in 2024, totaling $2.2 billion. While decentralized finance (DeFi) services experienced the largest share of these thefts, centralized platforms became primary targets in Q2 and Q3.
Private key compromises represented 43.8% of stolen crypto, with North Korean hackers responsible for $1.34 billion in theft, accounting for 61% of the total stolen funds last year.
Fraud ecosystem continues to grow more sophisticated
The fraud ecosystem within the crypto space continues to grow more sophisticated. Platforms like Huione Guarantee, a peer-to-peer marketplace, provide a range of illicit services that facilitate operations such as pig butchering scams.
Ruth, a Nigerian crypto trader, shared her personal experience of being approached to join a questionable crypto group. She revealed, “I know of a man who holds a respected federal office in Abuja. He opened an office with numerous computers, where he hires and trains young people to monitor market trends and trade on his behalf, yielding substantial profits.”
Ruth declined the offer due to concerns over the group’s legitimacy, emphasizing that similar groups operate across the country.
The Chainalysis 2024 Geography of Crypto Report highlights Nigeria’s leadership in cryptocurrency adoption. Sub-Saharan Africa received an estimated $125 billion in on-chain value between July 2023 and June 2024, with Nigeria ranking second globally in adoption.
Smaller denomination transactions dominate Nigeria’s crypto activity, with approximately 85% of transfer values under $1 million. Stablecoins play a significant role, constituting 43% of the region’s total transaction volume.
Nigerian influencers promoting fraudulent brands
Founder and CEO of Bchain Africa, Femi Adegolu, expressed concerns about the role of influencers in promoting crypto scams.
“Nigerian influencers with large followings on platforms like Twitter are often at the forefront of promoting questionable projects without adequate background checks,” he noted.
Femi admitted he was once approached with an offer to promote a brand but declined, cautioning influencers to act responsibly to protect their followers.
“What I’m just saying is that those people who are at the forefront of pushing cryptocurrency in Nigeria, especially influencers, can do better, because with a large audience, they command a lot of following, people trust them, people see them as someone that they can believe, that they can learn from. And if these same people are offered anything that will hurt their followers, and knowing fully well that it’s going to really cause a lot of problems, they should say no.”
What you should know
- Stablecoins have gained traction in Sub-Saharan Africa due to their ability to combat local currency volatility and limited access to U.S. dollars.
- Dollar-pegged stablecoins like USDT and USDC now facilitate value storage, international payments, and cross-border trade within the region.
- Tosin Emmanuel, Co-founder of Techways Consult, advised traders to diversify their investments.
“Crypto hacks are not new, and they have brought down many exchanges. That’s why I always tell people not to put all their money in one exchange,” he explained.
Femi concluded with a piece of timeless advice: “Don’t invest in people you don’t trust. Don’t invest in a project you don’t trust. Don’t invest in a coin you don’t trust.”
As Nigeria continues to solidify its position in the global crypto landscape, the need for clear regulations and protective measures becomes more crucial than ever.
