Nigeria’s Economic and Financial Crimes Commission (EFCC) has filed serious fraud charges against Afriq Arbitrage System Limited (AAS) and its CEO, Jesam Michael, over alleged unlicensed financial activities and investment fraud involving $844,416.36, $10,000, and ₦590 million.
The move marks yet another chapter in Nigeria’s growing crackdown on unauthorized cryptocurrency platforms, as regulators step up enforcement to protect consumers and sanitize the digital finance space.
Allegations of Unlicensed Investment Activities
According to the EFCC, Jesam Michael and his company operated in the specialized field of financial services, including investment management, without proper regulatory authorization. Between September 2022 and June 2023, the duo allegedly used aggressive advertising to solicit funds from the public, promising guaranteed returns through the Afriq Arbitrage crypto investment scheme.
One of the charges filed reads:
“That you, JESAM MICHAEL UBI, and AFRIQ ARBITRAGE SYSTEM LIMITED, sometime in 2022 in Abuja, with intent to defraud, induced Ladi Musa Audu to deposit the sum of $844,416.36 USDT into the Afriq Arbitrage System investment scheme, under the false representation that the investment was safe and refundable upon request.”
The EFCC noted that this conduct violates Section 1(2) of the Advance Fee Fraud and Other Related Offences Act No. 14 of 2006, punishable under Section 1(3). Additionally, operating without a license is a breach of Section 44(1) of the Banks and Other Financial Institutions Act, 2020.
Regulatory Momentum Building in Nigeria
This latest legal action comes amid Nigeria’s ongoing efforts to regulate and stabilize its burgeoning cryptocurrency and digital asset ecosystem.
In August 2024, the Securities and Exchange Commission (SEC) of Nigeria began issuing licenses to crypto firms under the Accelerated Regulatory Incubation Program (ARIP). However, progress has stalled, with only a handful of firms granted full licenses due to what SEC Director General Emomotimi Agama described as ongoing due diligence and multi-agency collaboration.
“We are working closely with the EFCC, NFIU, and the Office of the National Security Adviser (ONSA), all of which have their own internal review processes,” Agama told reporters earlier this month.
Many startups that applied for licenses under ARIP in mid-2024 remain in regulatory limbo, with the SEC stating that more robust checks are essential to protect investors and prevent fraud.
A Broader Clampdown on Unregulated Crypto Operators
The EFCC has been particularly active in 2024 and 2025, pursuing multiple cases against crypto firms conducting USDT-to-Naira exchanges without a license. Recent enforcement actions include:
- October 2024: Two platforms, Paparaxy Global Ventures Limited and Lemskin Technologies Limited, forfeited ₦160 million (~$97,500) to the Nigerian government after being convicted of unlicensed trading.
- November 2024: The EFCC secured a conviction against Plip Global Ventures for operating an illegal crypto exchange in violation of banking regulations.
The commission warns that further investigations are ongoing, and more entities may soon face penalties or be shut down entirely.
Why It Matters
Nigeria remains one of Africa’s largest crypto markets, with millions turning to digital assets for savings, remittances, and income generation. But the regulatory spotlight is now firmly on platforms operating outside the law, with the EFCC, SEC, and other agencies tightening their grip on illicit financial flows and fraud schemes.
The Afriq Arbitrage case is expected to send a strong message to both investors and operators: compliance is no longer optional.
