Nigerian Blockchain Expert Calls for Cryptocurrency Regulation to Curb Financial Crimes
Summary:
Adedeji Owonibi, Co-founder of A&D Forensics, stressed the need for the Nigerian government to regulate cryptocurrency activities to prevent financial crimes. Highlighting the lack of regulation in the Nigerian crypto space, he suggests the need for laws against illicit transactions. Owonibi's comments follow the recent withdrawal of a cryptocurrency transaction ban by the Central Bank of Nigeria (CBN), and he underscores the importance of compliance regulations to deter criminal activities. The proposed guidelines would allow virtual asset service providers to open accounts.
Co-founder of A&D Forensics, a Nigerian blockchain intelligence service provider, Adedeji Owonibi, has stressed the necessity for the Nigerian government to instate regulations surrounding cryptocurrency to reduce financial offences, particularly money laundering. On February 9 during a training session for cryptocurrency compliance experts organized by a Blockchain and Digital Forensic company, Owonibi highlighted the absence of regulation within the Nigerian cryptocurrency sphere has allowed several dubious procedures to go unregulated. He noted that effective cryptocurrency regulation in the country is essential as, without laws, there can be no legal wrongdoing.
This comes in light of the recent withdrawal of a cryptocurrency transaction prohibition by the Central Bank of Nigeria (CBN), which now permits banks to control accounts on behalf of Virtual Assets Service Providers (VASP). The training for compliance specialists, according to Owonibi, is to ensure that banks comply with applicable laws when dealing with VASPs. He also underscored the importance for all transactions passing through their exchange are scrutinized to ensure they aren't utilized for illicit activities.
Compliance regulations serve as safety nets to deter nefarious activities that can exploit financial institutions, such as banks, as conduits for money laundering and other criminal deeds. Previously, the central bank had disallowed banks and other financial entities from maintaining accounts for cryptocurrency service providers. Rules regarding opening accounts for virtual asset providers were specified to all banks and financial institutions on December 22, 2023.
Owonibi emphasized that banks should open accounts for compliant exchanges only, to prevent becoming hubs for activities like money laundering, drug sales, and financing terrorism on a global scale. He also indicated the Nigerian government's efforts in training law enforcement agents as compliance specialists, emphasizing the need to take additional measures to ensure all financial crime combatting officers are adequately trained.
The CBN's lifting of the banking ban is combined with guidelines allowing virtual asset service providers, which includes cryptocurrency and crypto asset entities, to open bank accounts within the country. Regardless of the ban lift, local crypto analysts have suggested revisiting the crypto licensing requirements of the Nigerian Securities and Exchange Commission’s (SEC) to facilitate local crypto exchanges obtaining licenses to operate within the country.
Published At
2/11/2024 4:05:29 PM
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