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Cybercrimes Thrives In Crypto Ecosystem Due to Lack of Regulation, Says EFCC

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The Economic and Financial Crimes Commission EFCC has bemoaned the lack of regulation of cryptocurrency operations as boost to growing rate of Cybercrimes in the crypto industry.

The Chairman of the EFCC, Abdulrasheed Bawa, stated this at a webinar in Lagos on ‘Digital currencies and crypto derivatives: Banking, regulatory and cybersecurity’.

The programme was organised by the Attorney General Alliance Africa in collaboration with the Lagos Business School, the EFCC, and the Fintech Association of Nigeria.

Bawa, who was represented by the Head of Cybercrime Unit of the agency in Lagos, Whyte Dein, identified other challenges as knowledge gap in the foundational know-how in the investigation of cryptocurrency, coin anonymisers (coin mixer) and high cost of subscribing to proprietary cryptocurrency investigation tools.

He highlighted some crypto scam schemes such as ‘pump and dump’ and ‘social engineering’ aimed at stealing private keys’.

“Over 1,500 fraudulent global resources aimed at potential crypto investors have been detected in Africa since the beginning of 2021. In Kenya, the share of all users targeted was 0.85 per cent. In Nigeria, it was 0.71 per cent,” he added.

The EFCC boss stated that the anti-graft agency would continue to review its strategies while looking at what other jurisdictions were doing as it battled cybercrimes.

The Director of AGA, Mr Marcus Green, said cybercrimes thrived on the continent partly due to lack of proper regulation.

He said, “Many countries in the world lack proper regulatory frameworks for cryptocurrencies and crypto derivatives, hence building an ideal ecosystem for cybercrimes to thrive.”

Green pointed out that in Nigeria, there was no specific regulation that declared cryptocurrency trading as illegal, although the Central Bank of Nigeria prohibited transactions on cryptocurrencies in the banking sector.

According to him, the group collaborates with government, non-governmental, private sector and civil society to provide legal training, strategic advisory programmes and strengthen the international rule of law specific to each country’s needs.

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