Shady Businesses Reliant on Stablecoins' Stability
In the dynamic world of cryptocurrencies, Africa continues to carve out its unique niche. Chainalysis reports that global illegal cryptocurrency activities totaled $40.1 billion in 2024, representing 0.14% of global on-chain value [1]. Despite this, illicit crypto transactions in Africa, particularly in Nigeria, account for billions of dollars but likely form a smaller fraction of the global illicit crypto volume [1][5].
Nigeria, with approximately $26 billion worth of crypto transactions in 2024, has emerged as a focal point for potential illicit use in Africa [1]. Bitcoin and other decentralized cryptocurrencies used through peer-to-peer (P2P) platforms are the most commonly used cryptocurrencies in illegal transactions in Africa [1][2][3]. Regulators in Nigeria have targeted P2P transactions and unlicensed crypto exchanges due to their role in hiding identities and enabling illegal activities like money laundering and currency speculation [1][3].
Africa's illicit crypto crime involves theft, money laundering, and increasingly Non-Fungible Tokens (NFTs), exposing structural regulatory challenges shared by African markets [2][5]. The Kenyan government, aiming to design its crypto regulations by drawing insights from global bodies such as the FATF, IMF, and Financial Stability Board, has introduced a draft policy to guide the regulation of virtual assets and service providers (VASPs) in the country [6].
Meanwhile, the MENA region saw Web3 as the most funded sector in December 2024 [4]. In a move to boost digital payments, Verda Ventures has partnered with Opera to launch a $40 million MiniPay fund [4]. South Africa's FSCA licensed 248 crypto firms in 2024, while Namibia's central bank has granted provisional licenses to two crypto firms, Mindex Virtual Asset Exchange and Landifa Bitcoin Trade CC [7].
The Kenyan government's flickering stance on crypto regulation notwithstanding, Kenya is the largest crypto market in East Africa [8]. Despite the BoN maintaining that cryptocurrencies hold no legal status, by 2022, it had allowed bitcoin to be used for payments at a merchant's discretion, although it remains non-legal tender in the country [9].
The Kenyan National Treasury and Economic Planning has introduced a draft policy to guide the regulation of virtual assets and service providers (VASPs) in the country [6]. In June 2023, Namibia's National Assembly passed a bill to recognize and regulate digital assets despite resistance from the BoN [7]. VISA has opened applications for Cohort 4 of its Africa Fintech Accelerator Program with a deadline of March 25, 2025 [10].
These findings indicate that while Africa’s illicit crypto activity is significant and growing, it reflects broader global trends of cryptocurrency misuse linked to pseudonymity and regulatory gaps. As the continent continues to embrace digital assets, the focus on regulating these activities to curb illicit use and ensure financial stability will remain crucial.
[1] Chainalysis 2024 Global Crypto Adoption Index [2] Chainalysis 2024 Crypto Crime Report [3] Nigerian SEC Cracks Down on Unlicensed Crypto Exchanges and P2P Transactions [4] Web3 Leads MENA Funding in December 2024 [5] Global Crypto Crime on the Rise: Chainalysis 2025 Report [6] Kenya's Draft Crypto Regulation Policy [7] Namibia Grants Provisional Licenses to Crypto Firms [8] Kenya Ranks Among Top Five by Volume in Cryptocurrency Usage Across Africa [9] BoN Allows Bitcoin Payments in Kenya [10] VISA Africa Fintech Accelerator Program Accepting Applications for Cohort 4
- Africa's dynamic crypto landscape, particularly in Nigeria, shows a potential for business opportunities despite the high incidence of illicit activities.
- Regulation of cryptocurrencies is becoming increasingly important in Africa, as they are being used in illegal transactions and money laundering.
- Fintech innovations, including DeFi and digital assets, are gaining traction in Africa, but their illicit use poses challenges to regulatory bodies across the continent.
- As Africa embraces cryptocurrencies, it is essential to establish effective policies to curb illicit activities while fostering financial stability.
- In the world of fintech, Africa is not only witnessing a surge in cryptocurrency usage, but also in investing in Web3 technology and boosting digital payments.
- Regulatory bodies in various African countries are taking steps to introduce policies for virtual assets and service providers, emulating global bodies like the FATF, IMF, and Financial Stability Board.
- Kenya, the leading crypto market in East Africa, has proposed a draft policy to guide the regulation of cryptocurrencies and service providers, aiming to ensure legal compliance in the sector.
- In a bid to foster digital financial services, VISA has launched its Africa Fintech Accelerator Program, offering resources to fintech startups across the continent.
