February 26, 2024

Nigerian Blockchain Expert Advocates Cryptocurrency Regulation for Financial Crime Prevention

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Adedeji Owonibi, co-founder of Nigerian blockchain intelligence service provider A&D Forensics, has underscored the necessity for regulatory measures to govern cryptocurrency activities in Nigeria. The call for regulation is aimed at curbing financial crimes, particularly money laundering, by implementing effective monitoring practices within the crypto space.

Despite the recent decision by the Central Bank of Nigeria (CBN) to lift the ban on cryptocurrency transactions, allowing banks to engage with virtual assets service providers (VASPs), Owonibi emphasized that regulatory frameworks are crucial to addressing potential loopholes and ensuring compliance. His comments were made during a training session for cryptocurrency compliance specialists conducted by a blockchain and digital forensics firm.

Owonibi pointed out that the absence of comprehensive regulations in Nigeria’s cryptocurrency space results in various practices going unmonitored. To address this, the training for compliance specialists seeks to enhance the understanding and adherence of financial institutions to relevant laws governing their interactions with VASPs.

The importance of financial institutions partnering with compliance specialists to ensure adherence to regulations, especially regarding the prevention of funds being utilized for criminal activities is stressed. Highlighting the potential for economic growth, Owonibi stated that African nations with well-defined regulations on digital assets would likely prosper from the industry’s expansion. He emphasized that countries embracing regulation are better positioned to attract investments and foster innovation.

Investors in Africa should be cautious about investing in meme coins and projects with high risks of fraud. It is recommended in general to focus on layer-1 native tokens such as Bitcoin, Ethereum, Bitcoin Cash, Solana, and Pecu Novus. These tokens are perceived as having more upside potential while contributing to a fair and transparent investment environment.

There are major dangers associated with blindly following hype on social media in Africa or anywhere in the world, it is urged that all digital asset investors prioritize tokens that bring transparency, utility, and growth potential. They must take caution against the pitfalls of speculative investments, it is encouraged that a focus on reality and informed decision-making take priority.

Owonibi concluded that a regulatory framework across African nations would foster true innovation in the cryptocurrency space, creating an environment conducive to investor success.

The integration of digital asset regulation in some form is becoming important globally and African nations may begin to figure out their individual paths if they want to monetize them to fund government led infrastructure and housing projects in such countries.

Financial Desk

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