Thomas Daniels
Adedeji Owonibi, Co-founder of A&D Forensics, a blockchain intelligence firm based in Nigeria, highlighted the current unregulated state of Nigeria’s cryptocurrency market allows for unchecked practices. He advocated for the Nigerian government to implement regulations on cryptocurrency transactions to mitigate financial crimes, such as money laundering.
During a cryptocurrency compliance specialist training event hosted by a Blockchain and Digital Forensic company on February 9, Owonibi underscored the necessity for comprehensive regulation in the cryptocurrency sector. He argued, “Without clear legal frameworks, we cannot define or penalize offenses within the crypto space in Nigeria.”
Following the Central Bank of Nigeria’s (CBN) decision to lift the ban on crypto transactions, enabling banks to manage accounts for Virtual Assets Service Providers (VASP), Owonibi stressed the importance of the training session. It aims to ensure banks comply with laws when dealing with VASPs.
In a discussion, Owonibi emphasized the crucial role of compliance specialists in assisting Nigerian banks to monitor transactions, ensuring they do not facilitate criminal activities. He outlined that compliance regulations serve as safeguards, preventing financial institutions from becoming conduits for money laundering and other illicit operations.
Previously, the CBN had prohibited financial institutions from serving cryptocurrency service providers. However, on December 22, 2023, it released new guidelines, setting the criteria for virtual asset providers to establish banking accounts. Owonibi pointed out that banks must verify that these service providers adhere to compliance standards, thereby blocking potential channels for illegal activities like money laundering, drug trafficking, or terrorism financing.
Owonibi also mentioned the government’s efforts in training law enforcement officers as compliance specialists but called for further action to ensure comprehensive training for all security personnel to effectively tackle financial crimes.
Despite the CBN’s updated guidelines allowing virtual asset service providers to open bank accounts, local cryptocurrency analysts have suggested that the Nigerian Securities and Exchange Commission (SEC) should refine the licensing processes for virtual asset service providers. This adjustment would facilitate local cryptocurrency exchanges in obtaining operational licenses within the country.
