Afriq Arbitrage CEO Jesam Michael Remanded in Custody Following Allegations of N590 Million and $854,000 in Fraud

Jesam Michael, the CEO of Afriq Arbitrage System (AAS), has been remanded in custody by the Federal High Court in Abuja over serious fraud allegations involving $854,416.36 and N590 million. The Economic and Financial Crimes Commission (EFCC) charged Michael and his cryptocurrency trading platform with orchestrating an investment scam that defrauded thousands of investors between September 2022 and June 2023.

The EFCC alleges that Jesam Michael and AAS operated without the necessary regulatory approval, inviting the public to deposit funds despite lacking a valid license from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). This violates Section 44(1) of the Banks and Other Financial Institutions Act, 2020. The commission also accuses Michael of money laundering, claiming he converted N590 million from the sale of properties linked to another suspect, Abayomi Oluwasesan, into his personal name, knowing the funds came from unlawful activities.

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Michael was arrested on January 29, 2025, at Murtala Mohammed International Airport in Lagos by the Inspector-General of Police Special Investigation Unit (SIU). Since then, he has been in custody, with his legal team arguing that he is a first-time offender willing to cooperate with authorities. However, the court denied his bail application on May 9, 2025, stating that arraignment must come first due to the seriousness of the charges and the large number of victims involved, estimated at about 50,000 people.

Afriq Arbitrage System, launched in January 2023, promised investors a monthly return of 63.5% through automated cryptocurrency arbitrage trading, claiming to use advanced algorithms and a Binance liquidity pool. Initially, the platform attracted thousands of investors worldwide, with events held in Nigeria, the United States, Canada, and the United Kingdom. But by mid-2023, many investors reported they could no longer withdraw their funds, raising suspicions of a Ponzi scheme.

The scandal deepened when Michael accused an employee, Abayomi Oluwasesan, of stealing $87 million. Oluwasesan admitted to some wrongdoing but contested the amount. Investigations revealed Michael transferred recovered assets into his name, fueling doubts about his intentions. The EFCC’s probe found that AAS lacked proper regulatory approval and engaged in questionable financial practices. A 2023 fact-check also showed that AAS was not built on blockchain technology, contradicting Michael’s claims and further damaging investor trust.

This case is part of Nigeria’s broader crackdown on crypto-related fraud amid concerns over unregulated digital investment platforms. In 2023, Nigeria’s crypto transactions reached $56.7 billion, prompting regulators like the CBN and SEC to tighten oversight to prevent capital flight and money laundering, especially after the naira’s sharp devaluation. The EFCC has also pursued other high-profile cases against crypto executives to protect investors.

Jesam Michael’s past ventures, such as COTPS and DAIZY AI, also collapsed, raising questions about his credibility. Despite his claims of fighting Ponzi schemes, the EFCC alleges that AAS operated similarly, luring investors with unrealistic returns. The ongoing investigations and asset recoveries aim to safeguard investors, but many still face uncertainty about recovering their money.

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The remand of Afriq Arbitrage CEO Jesam Michael for fraud signals a firm stance by Nigerian authorities against financial crimes. While the case may deter fraudulent schemes, it also highlights the challenges of balancing regulation and innovation in Nigeria’s growing digital finance sector. Michael’s defense maintains his cooperation, but the EFCC’s strong evidence and planned witness testimonies from regulatory bodies present a tough road ahead.

Jesam Michael, CEO of Afriq Arbitrage System, has been remanded in custody following allegations of investment fraud amounting to over $854,000 and N590 million. The case exposes risks in Nigeria’s crypto market and underscores the need for strict regulation to protect investors from scams.

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