Nigeria Urged to Regulate Cryptocurrency to Tackle Financial Crimes
Adedeji Owonibi, the Co-founder of A&D Forensics, a blockchain intelligence service provider, highlighted the need for Nigeria to regulate cryptocurrency activities in order to combat financial crimes, particularly money laundering.
Regulating Crypto to Prevent Financial Crimes
According to Adedeji Owonibi, the Co-founder of A&D Forensics, Nigeria needs to implement regulations for cryptocurrency to address financial crimes, especially money laundering. Owonibi emphasized that the lack of regulations in Nigeria's crypto space allows various practices to go unmonitored. He believes that without proper laws, there can be no offenses.
Despite the recent reversal of the cryptocurrency transaction ban by the Central Bank of Nigeria (CBN), there is still a need for regulations. Owonibi conducted a training session for cryptocurrency compliance specialists and emphasized the importance of banks adhering to relevant laws and using the services of compliance specialists to ensure that funds passing through their exchange are not involved in criminal activities.
The Role of Compliance Laws
Compliance laws serve as checks to prevent financial institutions, like banks, from being used as gateways for money laundering and other illegal activities. The CBN previously banned banks and financial institutions from operating accounts for cryptocurrency service providers, but has now permitted virtual asset service providers to open accounts with banks.
Owonibi stressed the need for financial institutions in Nigeria to ensure that the virtual asset service providers they work with are compliant exchanges. This is essential for preventing these institutions from becoming channels for money laundering, drug sales, or terrorism financing on a global scale. The training of law enforcement agents as compliance specialists is ongoing, but there is a need for further training to combat financial crimes effectively.
Improving Crypto Licensing Requirements
Despite the lift of the CBN's ban on banks, local crypto analysts have urged the Nigerian Securities and Exchange Commission (SEC) to revisit the guidelines for virtual asset service providers. They argue that the SEC's licensing requirements should be revised to enable local crypto exchanges to obtain licenses and operate within the country.
By regulating cryptocurrency activities and implementing stricter compliance measures, Nigeria aims to create a safer and more secure environment for crypto transactions while combating financial crimes.
