The House of Representatives Adhoc Committee investigating the economic, regulatory and security implications of cryptocurrency adoption and POS operations in Nigeria has expressed deep concern over rising fraud and regulatory breaches in the fintech and payment services sector.

Chairman of the Committee, Hon. Olufemi Bamisile, speaking at the Committee’s resumed session on Monday in Abuja, said weeks of engagements with regulators, security agencies, fintech companies and digital-asset stakeholders revealed “deep gaps” threatening the integrity of Nigeria’s digital-finance ecosystem.

Bamisile warned that POS operations, now central to everyday financial transactions, are increasingly becoming a hotspot for fraud. He cited alarming reports of unregistered agents, cloned terminals, anonymous transactions and weak Know-Your-Customer (KYC) procedures that expose Nigerians to financial losses and heighten security vulnerabilities.

According to him, the Committee is equally concerned about inconsistent regulatory practices across the sector, specifically the geotagging directive and uneven enforcement of agent-profiling standards, which he said have created operational challenges for legitimate operators while allowing bad actors to thrive.

The lawmaker also disclosed that the Committee had received “credible allegations” that some POS operators have begun offering cryptocurrency and other digital-asset services without proper licensing.

“This raises serious red flags around consumer protection, anti-money laundering standards, terrorism-financing risks, and the misuse of instruments originally designed for basic payment services,” he said.

Bamisile further drew attention to an emerging pattern of fraudulent companies being registered at the Corporate Affairs Commission (CAC) using stolen BVN and NIN details of unsuspecting Nigerians. These entities, he noted, subsequently open multiple bank accounts and exploit unverified POS agents to move illicit funds across the financial system.

Another major concern raised at the session was the storage of sensitive customer data on foreign servers by some fintech companies operating in Nigeria. Bamisile argued that this practice weakens the capacity of Nigerian regulators and security agencies to conduct real-time audits, trace suspicious transactions or enforce lawful directives, with “direct national-security implications.”

He, however, acknowledged that operators face their own difficulties, including overlapping regulatory mandates, inconsistent policies and multiple compliance requirements from different government agencies.

“This engagement is not adversarial,” he assured. “It is an opportunity for honest conversations, clarity and collaboration. Our goal is to recommend legislation that will deliver a harmonised regulatory framework, stronger security safeguards, improved consumer protection and an environment where innovation can flourish responsibly.”

The Committee is expected to continue its investigative hearings in the coming weeks as it prepares its final recommendations to the green legislative chamber for legislative action. (The Guardian)

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