On June 10, 2025 the Federal High Court in Abuja ordered that Jesam Michael, chief executive of Afriq Arbitrage System Limited, be remanded in custody at Kuje Correctional Centre following his arraignment by the Economic and Financial Crimes Commission. He faces serious allegations tied to an intricate crypto‑driven investment fraud that affected more than 50,000 investors between September 2022 and June 2023. The claims include the misappropriation of approximately $844,416.36, an additional $10,000, and ₦590 million collected under the guise of cryptocurrency arbitrage. The court cited the gravity of the accusations and the volume of victim petitions as primary reasons for denying bail. The arraignment, linked to file FHC/ABJ/CR/134/2025, sets a clear tone for a rigorous legal process, with trial proceedings scheduled to resume on June 20, 2025.
Background of Afriq Arbitrage System
Afriq Arbitrage System, a cryptocurrency trading platform founded by Jesam Michael, rose to prominence with promises of exceptional monthly returns—over 60 percent per month—leveraging automated arbitrage trading across exchanges. The platform attracted thousands of investors globally, staging launch events in Nigeria, the U.S., Canada, and the U.K. Despite its impressive marketing narrative, Afriq lacked approval from Nigeria’s financial regulators, including the Central Bank of Nigeria and the Securities and Exchange Commission. Operating without proper licensing, it fell under scrutiny for engaging in unlicensed financial services—a direct violation of the Banks and Other Financial Institutions Act, 2020.
By early 2025, mounting investor complaints surfaced as withdrawals stalled and assurances dried up. Investors lost confidence after reports emerged that Michael accused an employee of stealing $87 million and had allegedly used recovered assets for personal gain, fueling suspicions of deeper financial malfeasance.
Details of the Alleged Fraud
Scope and Timeline of the Fraud
Between September 2022 and June 2023, the EFCC alleges Afriq Arbitrage System solicited deposits from the public—despite not being licensed to do so—collecting approximately $844,416.36, $10,000, and ₦590 million. Funds were solicited via online promotions promising refundable safe investments, in clear violation of Section 44(1) of BOFIA, 2020.
Specific Offences
The EFCC’s seven‑count charge sheet under file FHC/ABJ/CR/134/2025 includes:
• Conversion of ₦590 million—allegedly proceeds from properties recovered from another suspect—knowing they were linked to criminal activity, violating the Money Laundering (Prevention and Prohibition) Act.
• Inducing Ladi Musa Audu to invest $844,416.36 USDT based on false representations of safety and refundability, in breach of the Advance Fee Fraud and Other Related Offences Act, 2006.
• Encouraging Sir Augustine E. Ibolo to deposit $10,000 USDT under identical false promises.
Unlicensed Operation
Afriq’s promotion of investment services without regulatory approval triggered multiple complaints. The EFCC is set to call witnesses from the Central Bank and the SEC to testify on the company’s lack of authorisation and unlicensed activity.
Legal Proceedings and Court Rulings
The legal proceedings against Jesam Michael and Afriq Arbitrage System have unfolded as follows:
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Initial Arrest: In January 2025, Michael was arrested by the Nigeria Police Force in connection with an ongoing fraud investigation. The arrest followed a report he filed alleging that he had been defrauded of $87 million by an employee, Abayomi Oluwasesan. Upon Oluwasesan’s arrest, he admitted to the charges but contested the amount involved, asserting it was significantly lower than claimed by Michael.
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EFCC Charges: In April 2025, the EFCC filed a seven-count charge against Michael and AAS, alleging fraudulent activities, including defrauding investors and operating without regulatory approval.
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Bail Denied: In May 2025, the Federal High Court in Abuja rejected Michael’s bail application, citing the severity of the charges and the potential risk of flight.
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Remand Order: On June 10, 2025, the court ordered Michael’s remand at the Kuje Correctional Centre, emphasizing the need for a speedy trial. The case was adjourned to June 20, 2025, for further proceedings.
Implications for Nigeria’s Cryptocurrency Landscape
The case against Afriq Arbitrage System and its CEO has significant implications for Nigeria’s cryptocurrency landscape:
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Regulatory Oversight: The incident underscores the need for comprehensive regulatory frameworks to govern cryptocurrency investments and protect investors from fraudulent schemes.
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Investor Awareness: It highlights the importance of investor education and due diligence before engaging in cryptocurrency-related investments.
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Legal Precedents: The case sets a significant precedent for how Nigerian courts handle cryptocurrency fraud cases, potentially influencing future legal actions in the sector.
The remand of Jesam Michael and the charges against Afriq Arbitrage System mark a pivotal moment in Nigeria’s efforts to combat cryptocurrency-related fraud. As the legal proceedings unfold, the case serves as a reminder for investors to exercise caution and for regulators to strengthen oversight in the rapidly evolving digital investment space. The outcome of this case could have far-reaching effects on the future of cryptocurrency investments in Nigeria and beyond.
