A Proper regulation of cryptocurrency in Africa is needed to effectively tackle cybercrime, Economic and Financial Crimes Commission (EFCC) Chairman Abdulrasheed Bawa, and the Attorney General Alliance (AGA) Africa board member, Mr Marcus Green, have said.
Bawa believes the absence of regulation of the operation of cryptocurrencies is one of the major challenges in investigating crime around the subject.
Green said cybercrimes thrive on the continent partly due to a lack of proper regulation.
They spoke at a webinar in Lagos on “Digital currencies and crypto derivatives: banking, regulatory and cybersecurity” organised AGA Africa in collaboration with the Lagos Business School, the EFCC and the Fintech Association of Nigeria (FinTechNGR).
Bawa, represented by the Head of Cybercrime Unit in Lagos, Dein Aside from the absence of regulation, other challenges, Whyte said, include the knowledge gap “in the foundational know-how” of crypto investigation and the high cost of subscribing to proprietary cryptocurrency investigation tools.
He also highlighted some crypto scam schemes, such as “pump and dump”, as well as “social engineering aimed at stealing private keys”.
Pump and dump is a securities scam usually involving stocks, in which scammers create false hype about a stock in order to generate interest.
“One of the schemes we recently discovered was when users received a message about the sale of an exclusive coronavirus vaccine earlier than official schedules and only for those who have Bitcoins.
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“This type of fraud was especially prevalent when the vaccines just become available,” Bawa said, adding that victims were mostly contacted online via social media.
He said the EFCC would continue to review its strategies while looking at what other jurisdictions are doing as it battles cybercrimes.
Green noted that digital currencies and crypto derivatives are part of the emerging currencies and new payment methods that are gaining acceptance in recent times.
“The COVID-19 pandemic has escalated the use of these currencies,” he said.
Green pointed out that Nigeria, for instance, lacks specific regulation that has declared cryptocurrency trading illegal or criminalised it, although the Central Bank of Nigeria (CBN) had prohibited transactions on cryptocurrencies in the banking sector.
“Many African countries and countries in the world lack proper regulatory frameworks for cryptocurrencies and crypto derivatives hence building an ideal ecosystem for cybercrimes to thrive,” he said.
The webinar, he said, was organised to provide an ideal platform to expose participants to the intrinsic banking, regulatory and cybersecurity issues in both digital currency and crypto-assets/derivatives.
AGA Africa, he said, collaborates with governments, the private sector and the civil society to provide legal training, strategic advisory programmes and strengthen the international rule of law specific to each country’s needs.
Executive Director, Information Technology and Operations at Access Bank Plc, Ade Bajomo, believes money has to be digitised to move with the times, noting that “the world is embracing modern technology”.
“Money will continue to be digitised as the world moves towards contactless payment,” he said.
Adedayo Adebajo of FinTech NGR emphasised that cryptocurrencies open up more sophisticated trading strategies and allow access to otherwise unavailable assets or markets, amongst other benefits.
He, however, warned that short term fluctuations can still lead to significant losses for users, adding that “derivatives bear an inherent risk,” even leaving a lot of people suicidal when deals go wrong.
Other facilitators included General Counsel for AGA, David C. Blake; founder of the Cyber Security Collective Africahackon, Dr Bright Gameli Mawudor; a certified digital finance practitioner (CDFP) Kombe Kaponda and Prof. Olawale Ajai of the LBS.
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