Recent investigations reveal that Boko Haram has turned to cryptocurrencies and digital finance to dodge oversight and sustain its terrorist agenda in Nigeria.
Here’s how it works – and what’s being done.
Why digital finance?
Crypto’s appeal: The group exploits cryptocurrency’s pseudonymity and decentralized nature to fund operations—purchasing weapons and covering logistics—without relying on traceable bank systems.
Peer‑to‑Peer (P2P) trading boom: Despite a 2021 ban by the Central Bank of Nigeria, crypto usage surged in informal networks. From July 2023 to June 2024, Nigerians traded roughly $59 billion via crypto platforms like Binance—fuelled mainly by economic instability.
2. Multi-pronged digital fundraising
Mobile money & POS agents: Boko Haram also channels funds through mobile payment apps and small open-loop POS agents. Investigators found networks of unlicensed mobile-phone and pharmacy shop agents linked to terror financing.
Cryptocurrency conversion: Funds are often funneled into local traders or NGOs (sometimes unwittingly), who convert them via crypto platforms, obscuring their origin.
3. Broader tech-enabled tactics
Encrypted messaging & social media: Boko Haram and ISWAP exploit Telegram, WhatsApp, and even TikTok for coordination and persuasion, extending their reach across borders.
Satellite internet & drones: Some militant factions now use satellite internet services (e.g., Starlink) and drones—underscoring Nigeria’s weak digital sovereignty.
4. Challenges in Nigerian financial surveillance
Weak regulatory frameworks: Bans on crypto have simply driven transactions underground. Informal systems like hawala, barter trade, and some fintech services continue unmonitored.
Inefficient agency coordination: Between financial and security regulators, collaboration remains patchy, leaving gaps in identifying and tracing illicit digital flows.
5. What’s being done
Account freezes & prosecutions: More than 1,100 bank accounts connected to terror networks were frozen in 2024. Courts also convicted over 85 financiers of Boko Haram-related crypto funding, and six Nigerians were charged in the UAE for moving $780K via crypto.
Strengthened fintech oversight: The Nigerian Financial Intelligence Unit (NFIU) is tracking suspicious transactions via mobile-money and POS systems. Enhanced coordination with the Economic and Financial Crimes Commission (EFCC) and local regulators aims to close loopholes.
Technology & international collaboration: Nigeria is exploring blockchain analytics, AI for transaction monitoring, and partnering with bodies like FATF, GIABA, and UN task forces to disrupt cross-border terror financing.
Summary
Challenge Impact Response Cryptocurrencies & mobile‑money use Enables untraceable fund flows Account freezes, prosecutions, fintech tracking Leaky informal networks Facilitates laundering via POS, hawala, barter NFIU-led intelligence gathering Weak regulation & coordination Allows digital financing to escape oversight New tech tools, global cooperation, strategic reforms
To effectively starve Boko Haram of funds, Nigeria must:
Deepen crypto regulation, monitoring P2P platforms and mandating KYC.
Tighten digital finance oversight, including mobile money and POS terminals.
Enhance inter-agency coordination – aligning NFIU, EFCC, CBN, and law enforcement.
Invest in tech-driven surveillance, especially blockchain analytics and AI.
Fortify policy via regional & international cooperation – GIABA, FATF, UN, bilateral action.
By understanding how digital finance has become a key tool for terrorism funding in Nigeria, we can prioritize smarter policies and technologies to plug those financial blind spots.
Stay tuned to BitKE for deeper insights into the evolving African crypto space.
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