Reps to probe cryptocurrency, virtual transactions, others 

The House of Representatives is set to investigate the status of cryptocurrency, and digital asset transactions in Nigeria to ascertain their possible threats to national security.

The resolution of the House followed the adoption of a motion on a matter of urgent public importance moved by a member representing Ifo/Ewekoro Federal Constituency, Ogun State, Mr Isiaka Ibrahim on Tuesday.

Others who would also have their activities investigated include international money transfer operators, payment gateways and platforms and cloud computing systems.

They are also to investigate the current status of the e-Naira on the global cryptocurrency platform, the cost incurred, processes undertaken, and statutory compliance in creating the digital currency.

The House also resolved to engage all relevant stakeholders “To initiate necessary processes for establishing required legislation and regulations, while establishing the profile of operators in the sector such as legal status, parent company, and assess their compliance with our existing statutes or complicity in infractions against Nigeria including money laundering, illicit transactions, currency speculation and bad practices.”

The House also resolved to coordinate the engagement of the Office of the National Security Adviser, other relevant agencies, cryptocurrency exchanges, and stakeholders “In tracking, identifying, and recovering illicit and laundered funds or assets.”

The basic motivation behind the move is to ensure that equity transparency and adherence to international best practices are adhered to by the government in investigating cryptocurrency exchanges and others.

Recall that the House had in the past few months, beamed its searchlights on cryptocurrency operators following petitions brought against them by civil society organisations.

Moving the motion, he highlighted “The growing global concerns about the national security implications of cryptocurrency transactions through cryptocurrency exchanges including consumer and investor security as these exchanges are said to enable money laundering by criminals and terrorists for their illicit activities.”

He added that as part of its sweeping market-friendly reforms designed to attract substantial foreign direct investment into the countries’ struggling economy, “This administration reversed the ban on cryptocurrency transactions in Nigeria imposed by the previous administration.

He assured the international community that the current moves by the Federal Government to sanitise the system “Should not be perceived by the global community and international investors as a policy somersault so early in the life of the administration and the existence of a hostile business environment.”

Isiaka also highlighted the concerns expressed by the Central Bank of Nigeria over the possibility of illicit transactions and money laundering on the cryptocurrency exchanges and their seeming use as an alternative platform for determining local foreign exchange rates.

He further added that the United States of America Treasury 2022 National Money Laundering Risk Assessment indicated that “Fiat and traditional financial activities contributed substantially higher (over 200 per cent) than digital assets transactions to global money laundering activities.

He said the conflict with the government about whether or not the crypto exchanges are determining the local foreign exchange rate and usurping the functions of the national bank “Does not appear to arise in otherdeveloped climes where appropriate statutes and regulations have been enacted and enforced to superintend crypto and other digital asset transactions.”

Following the resolution, the House referred the motion to the Committee on National Security and Intelligence with a charge to “Engage all relevant stakeholders to initiate necessary processes for establishing required legislation and regulations,” among others.

The committee is to report back to the House within eight weeks.