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Cryptocurrencies, other virtual assets are risky for Nigeria – ICPC boss

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BOLAJI Owasanoye, chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), says virtual assets and cryptocurrencies are risky for Nigeria.

A statement signed by Azuka Ogugua, ICPC spokesperson, quoted Owasanoye as saying this during his presentation to the Senate Committee on Banking, Insurance and Other Financial Institutions on the Central Bank of Nigeria’s decision to stop financial institutions from transacting cryptocurrencies.

“Virtual and cryptocurrencies pose serious legal and law enforcement risks for Nigeria. The current national identification number registration and linking with SIM cards is a pointer to the fact that insurgents, terrorists, kidnappers, bandits, and drug merchants have used the anonymity of unregistered SIM cards to commit their crimes with relative ease,” said Owasanoye.

He noted that anonymity in cryptocurrencies could be used as leverage for terrorism financing and other crimes.

Owasanoye stated that one of the commission’s current investigation on money laundering involving several hundreds of millions of naira had been difficult for the ICPC because the perpetrator used an ICT-aided transfer scheme to cover the tracks of the laundered fund.

The pros, cons of Nigeria’s cryptocurrency ban

Owasonaye further stated that the wallet of the user of the cryptocurrency system only stored information or encrypted links in the blockchain where transaction confirmation could be found,  revealing that over 3.5 billion dollar worth of bitcoin was associated with criminality in 2020.

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“This figure includes BTC addresses controlled by dark markets, ransomware actors, hackers, and fraudsters. The bitcoin will ultimately need to be laundered by these criminals, meaning it will make its way into an exchange where it can be converted to fiat currency and transferred to a bank,” the ICPC chairman said.

He stated that the risks involved in the use of virtual assets and cryptocurrencies could pose a threat to finance of government, and could lead to risk of theft and abuse as a medium of payment for hackers and ransomware. He further noted that it could lead to scams, use of crypto assets for Ponzi schemes, tax evasion, and corruption-linked illicit financial flows.

READ ALSO: Cryptocurrency has made naira valueless, claims Sani Musa

However, he noted that if the CBN would ban the use of crypto in Nigeria, there was a need for legal guidance so as to provide a legal force for such directives.

The ICIR had reported the pros and cons associated with the ban earlier placed on the use of cryptocurrencies in Nigeria by the CBN on February 5th, a directive that sparked public outrage on social media.

Like the ICPC boss, the CBN also claimed that crypto could be used to fund terrorism, a crisis that had hit the country before the prevalence of crypto-based transactions. But financial experts have largely disagreed with the government’s position.

Lukman Abolade is an Investigative reporter with The ICIR. Reach out to him via [email protected], on twitter @AboladeLAA and FB @Correction94

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