The International Criminal Police Organisation (INTERPOL) has revealed how a cryptocurrency-based Ponzi scheme targeting Nigerians and other nationalities was used to finance terrorism.
The scheme, according to an INTERPOL statement dated 22 October, masqueraded as a legitimate online trading platform but was found to be connected to terrorist financing networks.
|
|
The scam was uncovered during a two-month operation, codenamed Operation Catalyst.
Described as “first-of-its-kind,” the operation was jointly coordinated by INTERPOL and the African Union Mechanism for Police Cooperation (AFRIPOL) between July and September.
|
|
|
|---|
The scam spanned at least 17 countries, including Cameroon, Kenya, and Nigeria, defrauding more than 100,000 victims of an estimated USD 562 million.
Investigators linked several high-value cryptocurrency wallets associated with the scheme to potential terrorism funding activities.
The “transnational case involved a massive cryptocurrency-based Ponzi scheme, which claimed to be a legitimate online trading platform,” INTERPOL said in the statement.
It added: “The scheme accumulated more than 100,000 victims around the world, with an estimated loss to victims of USD 562 million. The investigations related to Operation Catalyst found that several large-valued wallets were potentially linked to terrorism financing activities.”
According to INTERPOL, the case is still ongoing, with investigations currently in progress.
In addition, it said, a “Red Notice” was issued against an individual believed to be “behind a sophisticated cryptocurrency scheme which scammed victims of approximately USD 5 million.”
“The scam redirected funds to multiple addresses and centralised exchange platforms to obscure the trail and convert the assets into fiat currency,” it said. “Investigators believe the case exhibits several traits consistent with known terrorist financing methodologies.”
Other components of the two-month operation
Apart from dismantling terrorism financing schemes, the transnational operation also targeted cyber-enabled financial crimes, money laundering, and other forms of illegalities, leading to 83 arrests across six African countries.
According to INTERPOL, the operation uncovered over $260 million in both fiat and virtual currencies potentially linked to terrorism-related activities, with $600,000 already seized and several ongoing investigations to trace additional assets.
More than 15,000 persons and entities were screened across participating countries, leading to the identification of 160 persons of interest, INTERPOL explained.
“Of the 83 arrests, 21 were for terrorism-related crimes, 28 were for financial fraud and money laundering, 16 were linked to cyber-enabled scams, and a further 18 were related to the illicit use of virtual assets,” said INTERPOL.
In Nigeria, the operation led to the arrest of 11 suspected terrorists, including high-level members of several terrorist groups.
“In Kenya, a suspected money laundering operation using a virtual asset service provider was identified as having potential links to terrorism financing. The scheme, worth approximately USD 430,000, involved 12 people, two of whom have so far been arrested,” INTERPOL said.
It added that two individuals were arrested in a separate operation in Kenya “for the online recruitment of young people from East and North Africa into terrorist groups.”
“The funds used for the recruitment and radicalisation were traced through a cryptocurrency trading platform, back to individuals in Tanzania,” it revealed.
In Angola, 25 people of various nationalities were detained after police uncovered informal value transfer systems connected to terrorism financing and money laundering. Authorities seized about $588,000, hundred mobile phones, and 40 computers, while 60 bank accounts were frozen.
INTERPOL said the pre-operation phase benefited from strategic cyber intelligence provided by digital platforms like Binance, Moody’s and Uppsala Security, which shared critical data on illicit cryptocurrency transactions.
Operation Catalyst, according to the statement, was conducted under the Inter-Agency Social Protection Assessment (ISPA) programme, funded by the German Federal Foreign Office. The countries that participated in the operation include Angola, Cameroon, Kenya, Namibia, Nigeria, and South Sudan.
Terrorism in Africa
From the Sahel, Lake Chad region, Horn of Africa to parts of Central Africa, violent groups continue to destabilise local communities, exploiting weak state controls, porous borders, and economic hardships to expand and embed themselves in conflict zones.
In Nigeria, Boko Haram and its major factions, Islamic State West Africa Province (ISWAP) and Ansaru, an al-Qaeda affiliate, have waged a years-long insurgency against the state, leaving civilians at a crossfire.
The Al-Shabaab terrorist group remains a major threat in Somalia and neighbouring countries, where it has staged violent attacks, targeting security forces and civilians.
In Sahelian states like Mali, Benin, and Burkina Faso, where Jama’at Nasr al-Islam wal-Muslimin (JNIM), an al-Qaeda franchise in the region, and Islamic State-affiliated terror groups overlap, civilians, humanitarian workers, and security operatives across the borders have been targeted.
JNIM has emerged as one of the most dangerous groups in the area, infiltrating borders and trying to create new empires in the coastal areas of the Ivory Coast and Ghana.
In the Democratic Republic of Congo (DRC) and Mozambique, the Islamic State Central Africa Province (ISCAP) continues to deepen interfaith tension as it targets more Christians and their worship centers.
Although there have been internal and regional counterterrorism operations against these groups, their reign of terror continues as they blend traditional and digital methods of warfare.
They have also diversified their sources of funding and logistical supplies through kidnapping for ransom, extortion, illegal mining, smuggling, and taxation of trade routes, as well as the misuse of cryptocurrencies and other forms of money transfer systems.
For instance, the Nigerian government often releases reports on suspected terrorism financiers, highlighting funding patterns.
In 2024, the government identified and sanctioned 19 terrorism financiers, including six Bureau De Change (BDC) firms, a document obtained by PREMIUM TIMES showed.
Earlier this year, the government said it convicted 100 “terrorist financiers” within the last two years.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
