Abdulmalik Olalekan OLADIPUPO2026-01-272026-01-272025-12kate TurabianP.hDhttps://repository.lcu.edu.ng/handle/123456789/1257Rapid proliferation of cryptocurrency has posed significant challenges to global security, particularly in developing countries with high rates of cryptocurrency-related terrorism financing, such as Nigeria and Kenya, where terrorist organisations exploit its decentralised and pseudonymous features to fund their activities, thereby complicating traditional counterterrorism financing frameworks. This study examines comparative analysis of cryptocurrency and terrorism financing in Nigeria and Kenya focusing on Policy Challenges and International Implications. The study objectives specifically investigate terrorist strategies, evaluate regulatory framework effectiveness, assess financing network transformations, analyse global financial system interconnections, and propose tailored policy solutions with international relevance while making use of Social Network Theory and Realism theory as its Theoretical framework. A mixed-methods research design was employed, integrating quantitative and qualitative approaches; the study sampled 103 participants, with 67 from Nigeria and 36 from Kenya, using purposive sampling techniques to ensure the selection of professionals with expertise in cryptocurrency regulation, counter-terrorism financing and cybersecurity, whilst data collection involved structured questionnaires, in-depth interviews with 11 key informants, and case studies, with quantitative data analysed using descriptive statistics, including mean, and percentage distributions with SPSS 27 software, and qualitative data examined through thematic analysis using NVIVO software. Findings reveal that terrorists exploit cryptocurrency’s anonymity, with 59.70% (X̄= 0.60) of Nigerian and 61.11% (X̄= 0.61) of Kenyan respondents noting fund acquisition, and 62.69% (X̄= 0.63) and 66.67% (X̄= 0.67) confirming transaction concealment; the study demonstrates that the existing counterterrorism financing frameworks in Nigeria and Kenya are ineffective in addressing cryptocurrency-enabled terrorism financing, as evidenced by 67.16% (X̄= 0.67) in Nigeria and 72.22% (X̄= 0.72) in Kenya reporting facilitation of international transactions, whilst financing shifts to digital networks, with 58.21% (X̄= 0.58) in Nigeria and 58.33% (X̄= 0.58) using exchanges. Local markets heighten global risks, with 67.16% (X̄= 0.67) and 72.22% (X̄ = 0.72) noting financial system impacts, though policy solutions remain viable, with 74.63% (X̄= 0.75) in Nigeria and 83.33% (X̄= 0.83) in Kenya supporting security monitoring. The thematic analysis underscores Nigeria’s P2P vulnerabilities and Kenya’s mobile money gaps, corroborated by cases like Binance and Taliban financing. In conclusion, cryptocurrency markedly enhances terrorism financing through anonymity and local adaptations, rendering current frameworks ineffective and escalating regional and global security threats, necessitating advanced tools and interstate collaboration to address technological and regulatory disparities. The study recommends establishing a Diplomatic Cryptocurrency Intelligence Consortium under the African Union to deploy blockchain analytics, enhance multilateral intelligence sharing, and train diplomats in countering anonymity-driven strategies, alongside a Regional Diplomatic Technology Alliance to bridge technological gaps through forensic training and harmonised regulations, ensuring robust responses to this evolving threat in an interconnected world. Keywords: Cryptocurrency, Terrorism Financing, Policy Challenges, International System, Diplomatic Strategies. Word Counts: 444enCryptocurrencyTerrorism FinancingPolicy ChallengesInternational SystemDiplomatic Strategies.Thesis