Nigeria Advocates for More Crypto Regulation

Nigeria seeks cryptocurrency regulation to prevent financial crimes, per A&D Forensics Co-founder Adedeji Owonibi’s advocacy.

In a recent development within Nigeria’s financial sector, Adedeji Owonibi, a leading figure and Co-founder at A&D Forensics, has highlighted the pressing need for stringent regulatory measures in the country’s cryptocurrency domain. A&D Forensics stands as a pioneering entity in blockchain intelligence, offering insights that are crucial for maintaining transparency and integrity within digital currency transactions. Owonibi’s remarks came to light during a specialized training event aimed at cryptocurrency compliance specialists, hosted by a notable Blockchain and Digital Forensic firm on February 9.

The essence of Owonibi’s message centers on the challenges posed by the current unregulated landscape of cryptocurrency in Nigeria. This lack of oversight, according to him, has opened the doors to various unchecked practices, potentially paving the way for financial malpractices including money laundering. His stance is clear: for Nigeria to effectively curb these financial crimes, it must adopt a comprehensive regulatory framework specifically tailored for cryptocurrency operations within its borders.

Owonibi’s advocacy for regulation in Nigeria is timely, especially in light of the Central Bank of Nigeria’s (CBN) recent policy shift. The CBN had previously imposed a ban on cryptocurrency transactions within the banking sector, a move that significantly hindered the operations of Virtual Assets Service Providers (VASP). However, in a reversal of this stance, the CBN has now outlined guidelines allowing these providers to engage with banks, provided they adhere to stringent compliance standards.

Safeguarding Financial Integrity

The focus of Owonibi’s discourse extends beyond mere regulation. He emphasizes the critical role of compliance specialists in ensuring that financial institutions, particularly banks, do not become conduits for illicit funds. The training session where Owonibi spoke was designed to equip these specialists with the necessary skills to monitor and verify the legitimacy of transactions involving VASPs. This move is part of a broader effort to ensure that the integration of cryptocurrency services within Nigeria’s banking sector does not compromise the country’s financial security.

Owonibi also shed light on the CBN’s guidelines issued to banks and financial institutions, which came on December 22, 2023. These guidelines mandate that banks must only service compliant exchanges, thereby acting as a barrier against the misuse of digital assets for illegal activities such as money laundering, drug trafficking, or financing terrorism.

Despite the progressive steps taken by the CBN and other regulatory bodies, Owonibi believes more can be done. He suggests that enhancing the training of law enforcement and security officials in financial crime compliance is essential for a robust defense against these threats. Additionally, he advocates for the Nigerian Securities and Exchange Commission (SEC) to refine its licensing requirements for virtual asset service providers. This would not only streamline the operational landscape for local crypto exchanges but also fortify the country’s stance against financial crimes facilitated through digital currencies.