Virtual Assets, Crypto-Currencies Risky For Nigeria’s Economy- ICPC Boss
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission, Prof. Bolaji Owasanoye (SAN), on Tuesday said virtual assets and Crypto-Currencies are risky for implementation in Nigeria.
Owasanoye made this known in his presentation to the Senate Committee on Banking, Insurance and Other Financial Institutions during its hearing on the Central Bank of Nigeria’s decision to stop financial institutions from transacting in Crypto-Currencies.
He said, “Virtual and Crypto-Currencies 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.
“Crypto-Currencies guarantee similar anonymity and can easily be used as leverage for terrorist financing and other crimes. With the NIN registration, Crypto-Currencies may become an alternative payment platform for kidnappers and this would be impossible for law enforcement to agencies to trace.”
The ICPC boss cited a case study of a current investigation by the Commission on money laundering involving several hundreds of millions of naira.
According to him, “The main suspect used technology in placing the money in the banking sector. A sizable amount was traced to several bank accounts but before investigators recovered some of the money, a large proportion had been made to disappear using serpentine ICT-aided transfer schemes that has so far eluded investigators.
“While the persons whose accounts were used have been located, the criminal mastermind has remained invisible and unidentified.
“This real ongoing case is a glimpse into the world of anonymity of virtual or digital transactions. With Crypto-Currencies, the wallet of the user of Crypto-Currency system only store information, or encrypted links in the Blockchain where transaction confirmation can be found.
“There is no movement of any ‘currency’ in the real sense of the word. By their very nature, they provide considerable anonymity that is almost impossible to be accessed by unauthorized persons, including law enforcement authorities.”
Owasanoye identified the use of virtual assets and Crypto-Currencies for criminal activities as a major risk associated with them.
He also listed other risks of the use of virtual assets and Crypto-Currencies to include: risk to finance of government, risk of theft of Crypto-Currencies, abuse as medium of payment for hackers and ransomeware, risk of exit scams, risks of use of crypto assets for ponzi schemes, risks of tax evasion, and risk as a source of corruption-linked illicit financial flows.
He further noted that the Central Bank of Nigeria’s ability to regulate monetary policy will be lost due to the fact that Crypto-Currencies are issued by private entities, which are foreign, and not issued or regulated by the bank.