DEVELOPING REGULATORY FRAMEWORKS TO PREVENT CRYPTO-RELATED SCAMS AND FRAUD IN NIGERIA

ABSTRACT The proliferation of cryptocurrency in Nigeria has introduced both significant economic opportunities and substantial risks. This research project examines the development of regulatory frameworks aimed at preventing crypto-related scams and fraud within the country. Nigeria's rapid adoption of cryptocurrency, driven by factors such as economic instability and the quest for financial inclusion, has outpaced the creation of effective regulatory measures, leading to increased vulnerability to fraud and financial crimes. This research adopts the Doctrinal method. This method utilizes the use of library for the collection of primary and secondary data. The primary sources includes; statutes, books and other relevant international legal instruments relating to the development of regulatory frameworks to prevent crypto-related scams and fraud. Textbooks, articles, journals, conference papers and online/internet publications will be consulted. An in depth evaluation of the associated problems of the various laws and Acts was carried out with a view to determining their utilitarian value. The study provides a comprehensive analysis of the historical development and growth of cryptocurrency in Nigeria, highlighting the socio-economic implications and the associated risks. It delves into the existing regulatory landscape, evaluating the roles and effectiveness of key institutions such as the Central Bank of Nigeria (CBN), the Nigerian Securities and Exchange Commission (SEC), and the Economic and Financial Crimes Commission (EFCC). Furthermore, the research identifies and discusses major challenges in developing effective regulatory frameworks, including classification and valuation issues, regulatory overlap, detection and monitoring difficulties, and legal ambiguities. To address these challenges, the research proposes a set of detailed recommendations. These include the need for clear legal definitions and classifications, the establishment of a unified regulatory framework, the adoption of advanced technological solutions for monitoring and detection, and enhanced capacity building and public awareness initiatives. Additionally, the study emphasizes the importance of international cooperation and regular review and adaptation of regulatory measures to keep pace with the evolving cryptocurrency landscape. This research aims to provide policymakers, regulators, and stakeholders with a roadmap for creating a robust regulatory environment that mitigates risks and promotes the safe and beneficial use of cryptocurrencies in Nigeria. The findings underscore the critical need for a proactive and adaptive regulatory approach to protect investors, safeguard the financial system, and foster economic growth through digital innovation.