Wednesday, June 19, 2024
HomeBTCCall for Strict Crypto Regulation in Nigeria to Combat Financial Crimes

Call for Strict Crypto Regulation in Nigeria to Combat Financial Crimes

In a significant move towards the regulation of cryptocurrency activities in Nigeria, Adedeji Owonibi, the Co-founder of A&D Forensics, a leading Nigerian blockchain intelligence firm, has called for comprehensive government oversight to combat financial crimes, particularly money laundering. Speaking at a training event for cryptocurrency compliance specialists hosted by a Blockchain and Digital Forensic firm on February 9, Owonibi highlighted the critical need for stringent regulations in the Nigerian cryptocurrency landscape, which currently suffers from a lack of oversight allowing various malpractices to flourish unchecked.

Owonibi’s remarks come in the wake of the Central Bank of Nigeria’s (CBN) recent policy reversal, which now permits banks to manage accounts for Virtual Assets Service Providers (VASP). This change marks a departure from the previous stance where financial institutions were barred from engaging with cryptocurrency service providers, underlining the evolving nature of Nigeria’s approach to digital currencies. Owonibi stressed, “Nigeria should completely regulate cryptocurrency activities within the country and set out laws to that effect because if there is no law, there is no offense.”

The training aimed at cryptocurrency compliance specialists is part of broader efforts to ensure that Nigerian banks and financial institutions comply with relevant laws when dealing with VASPs. Owonibi, in an interview, emphasized the critical role of compliance specialists in ensuring that transactions through exchanges are scrutinized to prevent funds from being used for illicit activities. He argued that compliance laws serve as essential checks to prevent financial institutions from becoming conduits for money laundering and other forms of financial crime.

Owonibi also pointed out that while the CBN has lifted the ban on banks dealing with cryptocurrency service providers and issued guidelines for virtual asset providers to open bank accounts, there remains a pressing need for these exchanges to be compliant. He warned that without rigorous compliance, banks could inadvertently become channels for money laundering, drug trafficking, or terrorism financing on a global scale.

Moreover, Owonibi highlighted the government’s efforts in training law enforcement agents as compliance specialists but urged for more comprehensive training to ensure all security officials are equipped to tackle financial crimes effectively.

Despite the positive steps taken by the CBN, local cryptocurrency analysts have advocated for the Nigerian Securities and Exchange Commission (SEC) to revisit and potentially revise the guidelines for virtual asset service providers. This revision would aim to facilitate the licensing process for local crypto exchanges, thereby fostering a more regulated and secure environment for cryptocurrency transactions in Nigeria. This call to action underscores the critical balance between innovation in the burgeoning field of digital currencies and the imperative need to safeguard the financial system against misuse.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

15 + five =

- Advertisment -

Most Popular