Regulators to check global cryptocurrency operations

Regulators across the globe are getting more serious about crypto this year, as concerns grow about the environmental impact of crypto-mining and the use of digital assets for illicit activities.

A Bloomberg report on Wednesday said governments are grappling with balancing the need for more oversight and investor protections with their desire to cash in on the burgeoning industry.

On Monday, Daily Trust reported that 281 crypto accounts operated by Nigerians on the platform of Binance Holdings Ltd were restricted on security concerns and money laundering.

Binance’s CEO and Asia’s richest man, Changpeng Zhao (CZ), in a letter, said: “Some 281 Nigerian accounts have been affected by these personal account restrictions, with approximately 38% of these cases restricted at the request of international law enforcement.”

In Russia, Vladimir Putin has indicated he supports a plan to tax and regulate crypto-mining, rather than ban it as was proposed by his central bank.

Key Democratic lawmakers in the US, which has become the largest bitcoin-mining centre following China’s ban last year, have been holding hearings and asking mining companies for details on their power usage and greenhouse-gas emissions.

The United Kingdom and Spain are taking steps to tighten rules around misleading crypto advertising, with a British watchdog proposing to restrict industry marketing to wealthy and experienced investors.

Singapore’s financial regulator has told crypto companies to refrain from advertising their services to the public.

Meanwhile, regulators in Estonia and the US are trying to crack down on what one American official referred to as “mountains” of fraud in the digital asset space, as they see coins being used for tax evasion, money laundering and even terrorism financing.

With so much activity in this space last month alone, the rest of 2022 is sure to be interesting when it comes to regulation.

Recall that in February 2021, the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, insisted on the bank’s decision to prohibit deposit money banks, non-banking institutions and other financial institutions from facilitating trading and dealings in cryptocurrency, stating that it was in the best interest of Nigerians.

“Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system,” he said.

The Nigerian Financial Intelligence Unit (NFIU) boss, Tukur Moddibo, also said cryptocurrency failed the critical tests of vulnerability and attendant risks, noting that his agency averted a $3 million fraud linked to 20 bank accounts.