UN Warns Terrorists Are Using Crypto and Drones in Northern Nigeria as Africa Tightens Financial Oversight

Key Takeaways:

• The United Nations warned that terrorist groups operating across Northern Nigeria and the wider Sahel are increasingly using cryptocurrencies alongside drones and encrypted communications.
• The warning reflects a broader evolution in terrorist financing rather than suggesting crypto has become the primary funding source.
• The development is likely to reinforce ongoing regulatory efforts around crypto compliance, AML, and transaction monitoring across Africa. 

Terrorist groups across northern Nigeria and the wider Sahel are getting more technologically sophisticated. Cryptocurrency, alongside drones and encrypted communications, is now part of their toolset, the United Nations has warned.

What the UN Actually Said

Leonardo Simão, the UN Secretary-General’s Special Representative for West Africa and the Sahel and head of the UN Office for West Africa and the Sahel (UNOWAS), issued the warning in a briefing to the UN Security Council. The briefing covered developments between November 29, 2025 and June 30, 2026.

Highlighted in his brief was the information that armed groups are using drones, sophisticated communications, and cryptocurrencies while coordinating operations across borders. The problem, per his briefing, is particularly acute in the central Sahel and northern Nigeria. 

The briefing also highlighted that extreme violence across Mali, Niger, Burkina Faso, and Nigeria has displaced roughly 6.8 million people. It had also left an additional 1.28 million people seeking refuge or asylum.

The Security Council responded by extending UNOWAS’s mandate through January 2029 and calling for deeper regional cooperation rather than military action alone.

The UN has not identified cryptocurrency as the dominant funding source. They have historically funded their activities via ransom kidnapping, extortion, and informal taxation, as well as smuggling and looting. What’s new, however, is that these groups are using virtual currencies to raise and move funds, partly by exploiting regulatory gaps that opened during the pandemic.

How Boko Haram and ISWAP Are Actually Using Crypto

There are detailed reports covering the financial activity of terrorist groups in the region. Research from the Global Network on Extremism and Technology (GNET) and HumAngle describes a financial system that’s modernising due to international sanctions and military pressure.

One of the ways these groups utilise crypto is dark-web donation drives. ISWAP and Boko Haram propaganda outlets have solicited donations in cryptocurrency, mirroring tactics used by ISIS affiliates elsewhere.

One such donation drive flier specifically solicited funds through Monero (XMR). Monero (XMR) describes itself as a “privacy coin” that uses ring signatures and stealth addresses to obscure the sender, receiver, and amount of every transaction. These features are alien to more traditional cryptocurrencies like Bitcoin or Tether transfers.

This preference is not unique to ISWAP and Boko Haram. ISIS-Khorasan Province, one of the Islamic State’s most active affiliates, has explicitly shifted its own fundraising away from Bitcoin and Tether and toward Monero through its propaganda magazine.

Reports also indicate that local business owners in Borno and Adamawa states have been pressured by traders suspected of having ties to accept payment in USDT or Bitcoin. While it is a far more mundane use case than dark-web fundraising, one could argue it is a more corrosive one, since it normalises crypto payments within the local shadow economy.

Findings by TRM Labs indicate that terrorist groups still appear to prefer using stablecoins and that widespread adoption of Monero is unlikely to scale quickly. This is partly because major exchanges have delisted privacy coins and partly because Monero is technically harder to acquire and use than Bitcoin or stablecoins.

Financial Crime Is Becoming Digital — And So Is the Toolkit

Illicit actors adopt whatever financial tools are available and adapt faster than regulation typically moves. Historically, that meant cash, hawala networks, gold, and informal bank accounts. Today it also means cryptocurrency.

Chainalysis’s 2026 Crypto Crime Report puts total illicit crypto activity worldwide at roughly $154 billion. It also found that stablecoins now account for about 84% of all illicit crypto transaction volume, up sharply from 63% in 2024. The increase is not because stablecoins are uniquely suited to crime; criminals prefer them for the same reason legitimate businesses increasingly prefer them. 

Stablecoins, in a world of highly volatile cryptocurrency, are relatively stable. They have broad liquidity and have cross-border transferability. Criminal and terrorist-financing networks are simply following the same incentives that drive everyone else toward stablecoins.

Why Blockchain Also Helps Investigators

Most people believe and have heard that crypto is anonymous. However, public blockchains are not anonymous by default, and in many cases they make investigation easier than cash ever was. Every transaction on a network like Bitcoin or Ethereum is permanently recorded and publicly visible.

Blockchain analytics firms like Chainalysis, TRM Labs, and Elliptic specialise in following that trail across wallets, exchanges, and even cross-chain bridges. Global law enforcement now use their tools to underpin a large share of global sanctions enforcement, from tracing North Korean state-hacking proceeds to unwinding laundering networks tied to Iran-linked militias.

The EFCC’s ability to identify and freeze specific wallet addresses holding tens of millions of dollars is itself a demonstration of that traceability. Monero and other privacy coins are the exception built specifically to defeat this kind of tracing, which is precisely why extremist propaganda increasingly asks for donations in Monero rather than Bitcoin. It is also why analysts still regard privacy-coin terrorism financing as a smaller, harder-to-scale slice of a much bigger picture.

What This Means for Africa’s Crypto Industry

The UN’s warning will accelerate regulatory scrutiny across West Africa and the broader continent. Virtual Asset Service Providers (VASPs) operating in Africa should expect stricter compliance expectations, particularly regarding KYC verification, politically exposed person (PEP) screening, and real-time transaction monitoring.

​Financial Intelligence Units (FIUs), such as the Nigerian Financial Intelligence Unit (NFIU), are expanding their oversight of peer-to-peer trading desks and payment gateways. Traditional commercial banks may maintain a cautious stance toward crypto-adjacent businesses, demanding higher compliance standards before providing fiat banking rails.

Notably, the outright bans instead of regulation created room for informal P2P channels to grow. This created a parallel market that allowed illicit activity to thrive. Regulatory bodies are now pivoting toward supervised participation. Notable examples include Nigeria’s Securities and Exchange Commission (SEC) introducing the Accelerated Regulatory Incubation Programme (ARIP), South Africa’s Financial Sector Conduct Authority (FSCA) licensing crypto asset service providers, and new VASP regulations taking shape in Kenya and Zimbabwe. These frameworks prioritise market transparency and transaction visibility over market prohibition.

Why This Matters

The challenge isn’t cryptocurrency as a technology. The industry needs to make sure digital financial infrastructure develops alongside the compliance tools, intelligence-sharing, and enforcement capacity needed to monitor it as effectively as the traditional banking system.

As Africa’s digital asset industry matures, robust, well-resourced regulation is shaping up to be one of the sector’s most important competitive advantages.