Nigeria In Grave Danger Over Crypto-Currency Transaction, Emefiele Tells Senate

…NFIU Stops $3m Crypto-Currency Scam

The Governor of the Central Bank of Nigeria, Godwin Emefiele, on Tuesday told the Senate Committee on Banking and Finance, Capital Market, ICT/Cyber Security that the country is in grave danger with the transaction in Crypto-Currency and Bitcoin.

Emefiele who appeared before the Senate Committee said that the virtual money component has been used by kidnappers and money launders to facilitate their illicit intentions.

Recall that the Senate had about two weeks ago summoned the apex bank boss to appear before it to explain why cryptocurrencies was banned.

The Central Bank of Nigeria had earlier this month ordered banks and other financial institutions in the country to close all crypto-currency accounts.

The apex bank had stated that it carried out the order because Cryptos were being used as tools for money laundering and sponsoring illicit activities.

But Emefiele disclosed that Nigeria comes second in the world after the United States in Crypto-Currency transaction because of rate of illegality it has assumed in the last three years

Emefiele also disclosed that the economic elements of the virtual transaction shields its players against being investigated.

He said, “Players in the dark financial system cannot be trailed that is why most governments in the world have not approved of it.

“We know enough at this stage to decide that the continuation of this crooked activity significantly threatens the safety and soundness of our financial system.

“The CBN has a responsibility as a primary regulator to protect activities of all actors and stakeholders and particularly uninformed actors in that space.

“That is why we have asked all banks to desisit from operating accounts to Crypto-Currency dealers in Nigeria.

“For the avoidance of doubt, we have asked our banking supervisors, our payment system and our ICT department to conduct a thorough investigation into the activities of current exchanges and their major players.

“The results of the investigation will lead to better understanding of their activities and may unveil their fraud in due cause.

“We know Crypto-Currency has been used to facilitate scam, they have been known to facilitate money laundering, they have been known to be an avenue through which kidnapers received ransoms and they have been known to be instrument use to finance terrorism not only in Nigeria but in different parts of the world.”

Kicking against the use of Crypto-currencies during his presentation, the Director/Chief Executive Officer of the Nigerian Financial Intelligence Unit, Tukur Moddido argued strongly why it should not be used.

He added that it failed the critical tests of vulnerability and attendant risks.

He disclosed that through its Cyber Intelligence, NFIU was able to stop a scam of roughly $3m.

He said: “Only last week, together with the Central Bank, we reversed more than $3m dollars back to a particular country. This is how bad it is.”

Moddido said that it was used to sponsor violence in Nigeria, adding, “if you like, call it terrorism, kidnapping or whatever it is. This is just the practical aspect of it.”