Regulating Cryptocurrency in Nigeria to Combat Financial Crimes

Adedeji Owonibi, the Co-founder of A&D Forensics, a Nigerian blockchain intelligence service provider, has emphasized the need for the Nigerian government to regulate cryptocurrency activities in order to prevent financial crimes, especially money laundering. Owonibi made these comments during a training session for cryptocurrency compliance specialists held by a Blockchain and Digital Forensic firm. He explained that the absence of regulations in Nigeria’s crypto space allows various illegal practices to go unnoticed. Owonibi stated that Nigeria should establish comprehensive cryptocurrency regulations and laws to address this issue.

Despite the recent reversal of the ban on crypto transactions by the Central Bank of Nigeria (CBN), which now allows banks to operate accounts for Virtual Assets Service Providers (VASP), Owonibi emphasized the importance of ensuring that banks comply with relevant laws when dealing with VASPs. He urged Nigerian financial institutions to employ compliance specialists to ensure that all funds passing through their exchanges are not involved in criminal activities. Compliance laws serve as safeguards to prevent financial institutions, such as banks, from being used as tools for money laundering and other illegal activities.

The CBN had previously prohibited banks and other financial institutions from operating accounts for cryptocurrency service providers. Guidelines were issued on December 22, 2023, outlining the conditions under which virtual asset providers can open accounts. Owonibi highlighted the need for banks to ensure that the virtual asset service providers they work with are compliant exchanges, thereby preventing the misuse of their platforms for activities like money laundering and terrorism financing.

Owonibi acknowledged that the Nigerian government has been training certain law enforcement agents as compliance specialists. He believes that more training is necessary to ensure that all security officials are well-equipped to combat financial crimes effectively. It is worth noting that the CBN has issued guidelines allowing virtual asset service providers, including cryptocurrency and crypto asset organizations, to open accounts with Nigerian banks. Despite this development, local crypto analysts have urged the Nigerian Securities and Exchange Commission (SEC) to review its crypto licensing requirements in order to enable local crypto exchanges to operate legally in the country.

8 thoughts on “Regulating Cryptocurrency in Nigeria to Combat Financial Crimes

  1. Let’s ensure that all financial institutions in Nigeria prioritize compliance to build a secure and trustworthy crypto ecosystem. 🔒📈

  2. It’s funny how Owonibi says that regulations will prevent illegal practices, but we all know that criminals will always find a way around the rules.

  3. It’s important for law enforcement agents to be well-equipped with the necessary training to effectively combat financial crimes. Knowledge is power! 📚🔒

  4. Owonibi’s emphasis on compliance laws serves as a reminder that we must prioritize financial security and prevent misuse of platforms. Well said! 👌🌐

  5. Compliance specialists play a crucial role in ensuring that funds passing through exchanges are not involved in illegal activities.

  6. The potential for a regulated crypto industry in Nigeria is immense. Let’s seize this opportunity and establish a strong framework!

  7. Owonibi is just trying to protect his own interests. He doesn’t care about the potential benefits that cryptocurrencies can bring to the Nigerian economy.

  8. Just another person trying to control and regulate an industry that they don’t understand. Leave cryptocurrencies alone!

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