According to Adedeji Owonibi, Co-founder of A&D Forensics Highlights Unmonitored Practices in Nigeria’s Crypto Space Due to Regulatory Gaps.
To combat financial crimes, particularly money laundering, the Nigerian government would need to regulate cryptocurrency activities, according to Adedeji Owonibi, co-founder of A&D Forensics, a provider of blockchain intelligence services in Nigeria.
On February 9, during a training for cryptocurrency compliance specialists hosted by a Blockchain and Digital Forensic firm, Owonibi referred to this. He noted that the absence of regulations in Nigeria’s cryptocurrency sector allows for the oversight of a variety of practices. What he stated was:
“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.”
Owonibi underscored the criticality for Nigerian financial institutions to engage compliance specialists in an interview to verify that no funds traversing their exchange are being utilized for illicit purposes.
By serving as balances to ensure that financial institutions, including banks, are not used as conduits to launder money and commit other criminal acts, compliance laws are intended to deter bad actors.
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A&D Forensics just wrapped up training a new batch of Cryptocurrency Compliance Specialists.
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— A&D Forensics (@ForensicsD) February 10, 2024Banks and other financial institutions were prohibited by the central bank from operating accounts for cryptocurrency service providers. All banks and financial institutions were issued the guidelines outlining the requirements for virtual asset providers to establish accounts on December 22, 2023.
Owonibi stated that to prevent virtual asset service providers from serving as global conduits for money laundering, drug trafficking, or terrorism financing, banks must verify that the exchanges they establish accounts are compliant.
Although the Nigerian government has provided compliance specialist training to some law enforcement agents, Owonibi stated that more must be done to ensure that all security personnel are adequately trained to combat financial offenses.
Nevertheless, according to regulations published by the CBN, virtual asset service providers, such as cryptocurrency and crypto asset organizations, are now authorized to establish bank accounts in Nigeria.
Local crypto analysts have advised the Nigerian Securities and Exchange Commission’s (SEC) crypto licensing requirements to reconsider the virtual asset services providers’ guidelines to permit local crypto exchanges to obtain licenses to operate in the country despite lifting the CBN bank prohibition.
