Nigerian government and law enforcement agencies have been called upon to “stop the demonization” the blockchain and cryptocurrency industry. According to the association, which advocates risk-based regulation of the crypto industry, financial institutions should not use Nigeria’s central bank directive as a reason to deny service to industry players.
Risk-based crypto regulation
The Blockchain and Crypto Industry Association has called on government and law enforcement agencies in Nigeria to stop demonizing and discriminating against blockchain and crypto entities. In its latest press release, the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) argues that Nigeria urgently needs risk-based regulation of cryptocurrency activities as well as capacity building.
In a press release , SIBAN reiterates its firm belief that the Central Bank of Nigeria (CBN) directive of February 5, 2021 does not prohibit cryptocurrencies in Nigeria. Nevertheless, despite the absence of a law arresting or prosecuting cryptocurrency organizations, the association said in a statement that industry players are being harassed.
“From time to time, individuals or entities involved in any blockchain or cryptocurrency activity in Nigeria face instances of unwarranted arrests and detentions, bank account blocking and closing, discrimination, extortion, harassment, intimidation, arrests and inquiries, especially since the CBN cryptocurrency directive of 2021,” the statement said.
In addition to asking security authorities to recognize blockchain and cryptocurrencies, SIBAN called on banks and other financial institutions to “appreciate the difference between blockchain technology and cryptocurrency.” The advocacy group said that in cases where cryptocurrency is not involved, banks and other financial institutions should not use the CBN directive to justify denial of service.
Capacity Building Recommended
SIBAN also believes that if agencies insist on treating blockchain the same way they treat cryptocurrencies, such a stance would affect the entire banking system. A statement warning of the consequences of such a move adds:
If treated in the same way, the CBN’s own blockchain-based electronic naira and any other blockchain-based product or service in the country will also suffer in the Nigerian banking and financial system. This, of course, is not the intention of the CBN.
To help Nigerian agencies stop treating blockchain or likening it to cryptocurrencies, the advocacy group recommended “building the capacity of banks and other financial institutions in blockchain and cryptocurrencies, particularly AML/CFT for virtual assets.”
Meanwhile, SIBAN, which describes itself as a pro-innovation and pro-regulation association, said that while it encourages its members to “adhere to the rule of law,” it will nonetheless “explore administrative and legal avenues for redress” when their rights are violated. On the other hand, it said in a statement that the association is willing to cooperate with regulators if such a request is made.
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