The Economic and Financial Crimes Commission has raised concerns over the growing use of cryptocurrency wallets to move suspected proceeds of corruption, disclosing that funds transferred from a local government account to a private company were later traced to crypto wallets.
EFCC Chairman, Ola Olukoyede, made the disclosure on Monday in Abuja while addressing media executives and journalists.
Olukoyede said the suspicious transaction was detected by the commission’s Fraud Risk Assessment and Control Department, leading investigators to temporarily restrict the account for 72 hours while they examined the movement and destination of the funds.
He did not disclose the identity of the local government, the company or the state involved.
According to him, investigators became concerned after public funds were transferred from a local government account to a private company and were subsequently traced to cryptocurrency wallets.
“When we see money moving suspiciously, we move in and freeze it in the interim. I know some of you are calling for my head. The account was frozen for 72 hours. Okay, come and show where this money is going? Why are you moving money? We saw money being moved from the local government account to a company. Apart from that phase, we discovered that the money has gone into cryptocurrency wallets,” he said.
The EFCC chairman defended the temporary restriction, saying financial intelligence agencies should be able to intervene when transactions raise reasonable concerns rather than wait until suspected funds have been completely moved beyond investigators’ reach.
He said, “Why must we be waiting for money to be stolen? Why can’t we change the narrative? And that’s the main thing we need to bring to the office.”
Public funds, crypto and new methods of concealment
Olukoyede said the development reflected the changing nature of financial crimes in Nigeria, noting that investigators were increasingly encountering cases where suspected proceeds of corruption were moved through cryptocurrency wallets instead of being kept in conventional bank accounts or converted immediately into physical assets.
He alleged that some public officials under investigation had used young people, including students, to create cryptocurrency wallets through which suspected proceeds of corruption were transferred.
“We have gotten to a stage in Nigeria now that public officials steal money and they put it in cryptocurrency wallets,” he said.
According to him, investigators sometimes struggle to trace tangible assets directly to suspects because the money may first be transferred to other people and then moved through digital wallets.
“Most of the directors we are investigating now, you can’t trace tangible assets to them. They steal this money, give it to students, give it to young people. They open cryptocurrency wallets all over the world. They plunder the money there within 24 hours,” Olukoyede said.
He added that such funds could subsequently be moved outside Nigeria and used to acquire properties and luxury items in other countries, making financial investigations more complex.
EFCC builds capacity to trace crypto transactions
The EFCC chairman said the commission had increased its capacity to trace cryptocurrency transactions, particularly those involving virtual asset service providers operating within Nigeria’s regulatory framework.
He disclosed that about 40 virtual asset platforms had been licensed, describing the development as part of efforts to improve oversight of the sector.
“Now we also have the capacity to trace cryptocurrency wallets now, at least with those that are registered in Nigeria, and we are doing that,” he said.
The disclosure highlights the increasing importance of blockchain analysis and digital financial intelligence in investigations involving suspected illicit funds.
Unlike traditional bank transfers, cryptocurrency transactions can move rapidly between wallets and across jurisdictions. Although transactions on many public blockchains can be viewed, identifying the individuals controlling particular wallet addresses may require further investigation and information from cryptocurrency platforms.
FG approves national crypto confiscation wallet
Olukoyede also disclosed that the Federal Government had approved the creation of a national confiscation wallet for virtual assets recovered by law enforcement agencies.
He said the arrangement was designed to address concerns over the custody and accountability of cryptocurrency and other digital assets seized during investigations.
“When you recover virtual assets, where do you put them? No accountability. That’s why we can’t continue like this,” he said.
The EFCC chairman said the commission had recovered virtual assets connected with the CBEX fraud and that the new national wallet would provide a central mechanism for storing confiscated digital assets.
“Today, now we have a national confiscation wallet. So if I confiscate virtual assets now, it’s a national wallet that we put into those,” he said.
The development is expected to provide a more structured system for the custody of recovered digital assets and improve accountability in the management of cryptocurrency seized during financial crime investigations.
‘Cybercrime is no longer just Yahoo Yahoo’
Olukoyede further urged the media and the public to broaden their understanding of cybercrime, arguing that sophisticated financial networks now involve young people who may be acting as intermediaries for individuals involved in corruption.
“When we are talking about cybercrime, please cooperate with us, understand the scope. Not just Yahoo. Some of the people you are calling Yahoo, see your young children; they are stealing on behalf of London, on behalf of public servants,” he said.
The EFCC’s disclosure has drawn attention to the vulnerability of public funds to increasingly sophisticated financial schemes, particularly where government money is transferred to private entities before being moved through digital channels.
Local government funds are intended for public services and development at the grassroots level. Consequently, transfers involving such funds are expected to have legitimate purposes, proper documentation and appropriate authorisation.
While the EFCC has described the transaction as suspicious, the disclosure does not by itself establish that the funds were stolen or that any individual committed an offence. The identities of the local government, private company and persons connected to the transaction were also not disclosed.
The case nevertheless illustrates the changing nature of financial crime investigations in Nigeria, with agencies increasingly relying on conventional financial intelligence alongside blockchain analysis and digital forensics to trace the movement of suspected illicit funds.
