Nigeria’s Efforts to Clarify Crypto Regulation
A blockchain firm in Nigeria has completed the training of its fifth cohort of crypto compliance specialists, prompting calls for further clarification on crypto regulations in the country. The training, conducted by A&D Forensics, focuses on curbing financial crimes committed using blockchain technology, such as money laundering and sanctions evasion. The company’s co-founder emphasized the need for a comprehensive regulatory framework to reduce the rate of financial crimes. Currently, the legal status of Virtual Asset Service Providers (VASPs), including exchanges, remains uncertain. The co-founder called on the state to intensify its efforts in enacting comprehensive legislation to address this issue.
Nigeria’s Incremental Path to Regulation
In 2021, the Nigerian Central Bank initially banned crypto payments within the country but later overturned the ban. It also became one of the first central banks to issue a central bank digital asset (CBDC). However, stringent requirements were imposed on Nigerian VASPs, allowing them to open bank accounts but limiting their use for digital asset transactions only. Banks are still prohibited from holding crypto and must report on their VASP account holders to the central bank. They are also required to conduct risk assessments and due diligence on their crypto clients to combat financial crime.
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