The Federal High Court in Abuja has today, Friday, May 9, 2025, denied the bail application of Jesam Michael, the Chief Executive Officer of Afriq Arbitrage System (AAS), a cryptocurrency trading platform accused of defrauding investors of over $854,000 and ₦590 million. The Economic and Financial Crimes Commission (EFCC) has charged Michael and his company with operating an unlicensed investment scheme that allegedly induced unsuspecting investors to deposit substantial sums under false pretences.
The EFCC’s case against Michael and Afriq Arbitrage centres on allegations that, between September 2022 and June 2023, the defendants invited the public to invest in AAS through advertisements, despite lacking authorisation to collect deposits or operate as a financial institution.
According to court documents, this violates Section 44(1) of the Banks and Other Financial Institutions Act, 2020. The commission further accuses Michael of engaging in unlicensed financial services, including investment management, which allegedly led to significant financial losses for investors.
Specific charges highlight two victims: Ladi Musa Audu, who was allegedly induced to deposit $844,416.36 in USDT (Tether cryptocurrency) in 2022, and Sir Augustine E. Ibolo, who reportedly lost $10,000 in USDT in February 2023. The EFCC claims these investments were made under false assurances that the funds were safe and refundable upon request. Additionally, the commission alleges that AAS defrauded investors of ₦590 million, further compounding the financial distress faced by those who trusted the platform.
Background of Afriq Arbitrage CEO Jesam Michael’s trial
Michael’s legal troubles began earlier this year when he was arrested on January 29, 2025, at Murtala Mohammed International Airport in Lagos by operatives of the Inspector General of Police Special Investigation Unit (IGP SIU). The Nigeria Police Force confirmed the arrest, dismissing Michael’s claims of harassment and emphasising that the investigation focused on protecting investors who faced “uncertainty and financial distress”. A comprehensive interview regarding the management of investors’ funds was underway at the time, according to Force Public Relations Officer ACP Olumuyiwa Adejobi.
The bail hearing earlier slated for today was a critical moment in the case. Michael’s defence team argued for his release, citing his willingness to cooperate with authorities and his status as a first-time offender. However, the prosecution, led by the EFCC, opposed the application, arguing that Michael posed a flight risk, given his attempted travel to Europe at the time of his arrest. The court sided with the prosecution, denying bail and ordering Michael to remain in custody pending further proceedings.
The EFCC’s pursuit of Michael and AAS underscores Nigeria’s growing crackdown on unregulated cryptocurrency platforms. The commission has emphasised that the charges serve as a warning to operators in the crypto sector, which has long operated in a regulatory grey area. Most importantly, the case highlights the need for stricter oversight to protect investors from fraudulent schemes promising high returns.
Michael, a Cross River State indigene, had positioned himself as a prominent figure in Nigeria’s crypto space, often referred to as a “Crypto King” by local media. His platform, AAS, promised investors lucrative returns through arbitrage trading, a strategy that exploits price differences in markets. However, the EFCC alleges that the platform’s operations were a facade to lure investors into parting with their money.
As the case progresses, it raises broader questions about crypto regulation in Nigeria, where digital assets have gained popularity over the years amid economic challenges. This is important, especially as the Nigerian government recently signed the Investment and Securities Act 2024, which replaced the outdated 2007 Act and introduced a comprehensive framework for regulating cryptocurrency investments in the country to balance innovation with investor protection. The outcome of Michael’s trial could set a precedent for how authorities address similar cases in the future.
The Federal High Court has yet to schedule the next hearing, but the denial of bail ensures that Michael will remain in custody as the EFCC builds its case. Investors affected by AAS’s collapse are watching closely, hoping for justice and potential restitution.
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